tag:blogger.com,1999:blog-33812369Thu, 30 Jul 2015 03:18:46 +0000Web 2.0ConferenceSecond Lifearts education subscriptions development marketing tcghttp://www.blogger.com/img/blank.gifjournalismmedia relationssocial mediaArts MarketingThis blog has been created to discuss arts marketing related issues in the United States.http://arts-marketing.blogspot.com/noreply@blogger.com (Chad M. Bauman)Blogger189125tag:blogger.com,1999:blog-33812369.post-5369106160989157310Sun, 24 Aug 2014 21:25:00 +00002014-08-24T16:25:49.518-05:00Fearing Fear Itself <span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Several months ago, my former employer Arena Stage hosted a </span><a href="http://dctheatrescene.com/2014/02/19/arena-stages-first-summit-peter-marks-sparks-debate/"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="color: #0563c1;">series of conversations entitled “The Summit”</span></span></a><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"> curated by <i style="mso-bidi-font-style: normal;">Washington Post</i> theater critic Peter Marks. In the first of three conversations, Mr. Marks began the discussion by citing the falling attendance rates at theaters as put forth by the NEA’s most recent </span><a href="http://arts.gov/news/2013/national-endowment-arts-presents-highlights-2012-survey-public-participation-arts"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="color: #0563c1;">Survey of Public Participation in the Arts</span></span></a><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">, and asking five theater leaders to discuss various factors that may have led to declining attendance. Towards the end of the evening, a question was asked about gender parity in regional theaters, both in the terms of female directors and playwrights. It set off a </span><a href="https://storify.com/bostonturgy/thesummit"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="color: #0563c1;">passionate discussion</span></span></a><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"> about why women aren’t better represented at our nation’s regional theaters. </span><br /><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><br /></span><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Fast forward a couple of months, and we received news that San Jose Repertory Theater would be closing its doors after 34 years. Many of us knew that San Jose Rep had been struggling, and questions surfaced as to why a regional theater could not seem to sustainably operate in the resource rich Silicon Valley. Soon after the announcement was made, some began to declare that San Jose’s closing was due to their inability to deeply connect with their community. In an interview with the </span><a href="http://www.mercurynews.com/entertainment/ci_25947584/san-jose-rep-shuts-down-files-bankruptcy"><span style="color: windowtext; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">San Jose Mercury News</span></a><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">, local scholar and director Tlaloc Rivas stated “This is what happens when your theater is deliberately indifferent to the diversity of your city.”&nbsp;<span style="mso-spacerun: yes;">&nbsp;&nbsp;</span><o:p></o:p></span><br /> <br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">As 501(c)3 non-profit organizations, we have a responsibility to represent our communities, and in some cases, our communities have changed or are rapidly changing and our arts organizations haven’t adapted. It is almost as if some are programming their organizations to reflect the 1960s version of their cities. But why? I believe this is occurring at least in part not because of the reasons that have already been discussed, but primarily as a result of fear. During the global economic crisis, several theaters exhausted their cash reserves and dipped into their endowments to offset plummeting sources of contributed revenue. Many survived, but emerged on life support. Earned revenue became much more of a driving factor as support from state and local government, corporations and foundations nose-dived. It became clear that in order to stay alive, many would have to rely on box office revenue as their primary revenue source. As marketers, we know that when looking at the 4 Ps of marketing (product, place, price and promotion), that by far product is the most impactful on box office revenue. In an attempt to adapt to the worsening economic environment, some theaters began to program “safer” seasons, and increased ticket prices to drive more revenue. Many adopted models that looked far more similar to Broadway than the regional theater just a few years prior. I don’t say this to be judgmental, only to illustrate that desperate times required desperate measures for some.&nbsp;</span><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p>&nbsp;</o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">As a consultant, I noticed that many of my clients during this time selected their seasons from a place of fear. And I couldn’t blame them. The one thing they could control was their operating expenses as no one could reasonably predict revenues. Shows got smaller, cheaper and less “risky” (though as I have </span><a href="http://dctheatrescene.com/2012/04/17/what-is-safe-in-the-theater/"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="color: #0563c1;">previously blogged about</span></span></a><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">, trying to determine what is “safe” in the theater can be a fool’s errand).Given their financial positions, one wrong move and it was over. Gone were the days of unrestricted operating grants, endowment draws and investment gains that could offset programmatic risks. Many Artistic Directors needed to ensure that the audiences they had would stay with them through the storm, and therefore, some programmed “tried and true” plays that they believed would please their audiences. Perhaps necessary at the time, this is not a forward-thinking strategy.&nbsp;</span><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p>&nbsp;</o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Five years after the market crash, the stock market is at an all-time high, and experts are declaring that we’ve emerged from the recession. But some temporary programmatic measures adopted during the recession continue today at some theaters across the country. And I believe there is an easy explanation. Theatre Communications Group in its most recent </span><a href="http://www.tcg.org/pdfs/tools/TCG_TheatreFacts_2012.pdf"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="color: #0563c1;">Theater Facts reports</span></span></a><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"> shows that working capital at theaters nationwide has decreased by 82% from 2008 to 2012. In addition, growth in cash reserves lagged inflation by 16%. The working capital ratio for theaters dropped by 25% in four years. So, what does all this mean? Many theaters remain as risk-adverse today as they were during the height of the recession because there is no safety net. However, those that are waiting until sunnier days to make programmatic adjustments are living in a fool’s paradise. And I would argue that it is perhaps riskier not to make programmatic adjustments to better reflect the communities you serve than it is to “play it safe” and make programming decisions for an audience that is rapidly decreasing.&nbsp;</span><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p>&nbsp;</o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Some unsolicited advice for arts organizations that find themselves in this situation:</span><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p>&nbsp;</o:p></span></div><br /><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><!--[if !supportLists]--><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">1)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Build an artistic capital fund if possible</span></b><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">. Typically, I would say that nothing is less sexy than hitting up donors to help create cash reserves. But, you need risk capital. If you are living constantly on the edge, you’ll never be able to look beyond today. And as your community changes, you’ll stagnant. Consider this an innovation fund. Something that gives you the freedom to risk and improve without the fear that a small failure will cause your demise. <o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">2)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Look at the unmet needs in your community, and develop programming for them. </span></b><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">You don’t have to radically change everything overnight, but take incremental steps to program to underrepresented and underserved populations in your community. <b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">3)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Marketers must become relationship builders as much as we are revenue generators.</span></b><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"> To be successful, we’ll need to develop new relationships and outreach strategies. I’m impressed by recent initiatives at </span><a href="http://pasadenaplayhouse.org/blog/2014/02/20/introducing-consensus-organizing-for-theater-tcgcircle-org/"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="color: #0563c1;">Pasadena Playhouse</span></span></a><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"> riffing off concepts pioneered by </span><a href="http://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;frm=1&amp;source=web&amp;cd=1&amp;ved=0CB0QFjAA&amp;url=http%3A%2F%2Fwww.woollymammoth.net%2F&amp;ei=3mndU6vsGpKhyASMloDADw&amp;usg=AFQjCNGx0rCOGnEUqrjBEUK2VNtBip3t-w&amp;sig2=G60dz3RSfCvMCPxdGshlhQ&amp;bvm=bv.72197243,d.aWw"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="color: #0563c1;">Woolly Mammoth Theater Company’s</span></span></a><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Connectivity Program where they have marketing staff that are much more akin to community organizers. If you are new and trying to build new relationships, don’t be surprised if some view you as suspect. In some cases, you might be speaking with someone, to use a term coined by </span><a href="http://www.amazon.com/Invitation-Party-Building-Bridges-Community/dp/1559362308"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="color: #0563c1;">Donna Walker-Kuhne</span></span></a><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">, who has never been invited to the party before. So they may be curious why now? <b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">4)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Don’t give up quickly. </span></b><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Don’t<b style="mso-bidi-font-weight: normal;"> </b>expect immediate results, and avoid developing transactional relationships. This is about becoming a better citizen of our communities. Arts organizations that have excellent track records for developing young and diverse audiences have committed countless hours and significant resource for years. <b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">5)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Listen.</span></b><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"> We don’t operate in vacuums. We operate in complex and evolving communities. Don’t assume that you know what’s best for your community. Invite people into the process. Hear their voices. You may be much more successful at certain initiatives than you thought, and you could find that you need to dedicate more time and attention to initiatives you’ve never considered. If you are a larger institution, be careful that national aspirations don’t trump local needs. Many of us operate in both national and local communities, but unless you are a destination organization, your audiences are local. I think I’ll call this the </span><a href="http://www.politico.com/story/2014/06/eric-cantor-primary-election-results-virginia-107683.html"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="color: #0563c1;">Eric Cantor</span></span></a><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"> principle. <b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div><br /><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">6)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">As we’ve been taught, the biggest thing to fear is fear itself.</span></b><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">I’m always amazed by the number of managers who would rather stick with a failing business plan that is destined to lead to disastrous results than risk throwing it out the window for a shot at success. Why rearrange the chairs on the Titanic? Put on a life vest and take a leap. In an attempt to keep your organization afloat by maintain status quo, you may ensure you’ll be alive tomorrow but you can be certain you’ll be dead soon thereafter. <b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">Adopting temporary tactics to whether a storm is perfectly understandable in some respects. But non-profit arts organizations cannot adopt long-term strategic plans that focus primarily on staying alive. If we aren’t fulfilling our missions or serving our communities as they are today, then what is the point? We have an obligation (and the privilege) to produce art that is reflective of the diverse communities we serve. To employ artists that push us beyond our comfort zone. To engage, develop and nurture a heterogeneous talent pool that challenges us to examine the issues our communities grapple with from multiple perspectives. And if fear of taking a leap into the unknown is what is holding you back, what you really should be afraid of is becoming irrelevant – because I can guarantee that will happen. And then it is over. <o:p></o:p></span></div>http://arts-marketing.blogspot.com/2014/08/fearing-fear-itself.htmlnoreply@blogger.com (Chad M. Bauman)0tag:blogger.com,1999:blog-33812369.post-6368608511774635939Thu, 25 Jul 2013 03:20:00 +00002013-07-24T22:20:02.759-05:00On Hiatus Until FallHello world. Sorry I haven't participated as much as I usually do both on this blog and in dialogue on other social media outlets. As I've accepted a new position as Managing Director of Milwaukee Repertory Theater, all of my energies have been focused on relocating to a new city and learning about my new theater. Looking forward to reentering the blogosphere in the fall, and to participating in conversations in the near future!<br /><br />Chadhttp://arts-marketing.blogspot.com/2013/07/on-hiatus-until-fall.htmlnoreply@blogger.com (Chad M. Bauman)1tag:blogger.com,1999:blog-33812369.post-2782644524342180067Sun, 03 Mar 2013 20:35:00 +00002013-03-03T19:27:41.061-05:00What if you didn't have to guess?In decades past, the success of a marketing director depended heavily on his or her&nbsp;ability to predict the future, often times by guessing. Guess well, and you were a success. Guess poorly, and your marketing career was short-lived. Marketers became adept at reading the tea leaves, and depending upon their gut and experience to make educated guesses. <br /><br />As my friend Rick Lester says, "prayer should not be a marketing strategy." On this blog, I've written several times about the importance of using data to make decisions. Often times companies have years of transactional data that can be invaluable when developing strategy for future campaigns. That said, I've somewhat neglected another important tool that I've used throughout my career to help guide decision-making - market research. Combined, market research and data analysis form a formidable team. One should not be chosen over the other, but they should be used in tandem, and if done so, the need to guess is almost virtually eliminated. <br /><br />Data analysis is best used&nbsp;to help inform future operating decisions that closely align with past performance. For example,&nbsp;when rescaling a house, marketers can be relatively certain which&nbsp;seating&nbsp;sections can withstand a price&nbsp;increase by analyzing sales patterns and looking for sections that are&nbsp;in constantly&nbsp;high demand.&nbsp;We can also tell which households are most likely to subscribe and what package and price point to pitch based upon their interactions with us. But what happens when you are faced with the unknown? Over the years at Arena Stage, I've been faced with challenges that have very few, if any, precedents.&nbsp;There wasn't any data to pull from, either internally or from other companies. We were in uncharted waters. And that's when market research became critical. <br /><br />Since moving to Washington, DC seven years ago, both at Americans for the Arts and Arena Stage, I've depended on the wise counsel of <a href="http://www.shugollresearch.com/service_management.html">Mark Shugoll</a>, CEO of <a href="http://www.shugollresearch.com/about_management.html">Shugoll Research.</a>&nbsp; Throughout the years, Shugoll Research has conducted many studies that have helped inform my decision-making, and below are just a couple of instances where market research was invaluable:<br /><br /><strong>Arena Restaged. </strong>In January 2008, Arena Stage moved from its SW DC home into two temporary locations - a theater in the basement of a Marriott&nbsp;in Arlington, VA and the Lincoln Theatre in NW DC on U Street. We would remain in these&nbsp;temporary locations for two years and eight months while the <a href="http://www.arenastage.org/plan-your-visit/the-mead-center/">Mead Center for American Theater</a> was&nbsp;built. During that time, we had to minimize patron attrition&nbsp;caused by&nbsp;the move, and work to grow our audience base, as the new building would require a significantly increased patron base. I searched the country for a good precedent to learn from, but not a single&nbsp;one surfaced. Feeling on our own, I turned to Shugoll Research to help map out a strategy. I wanted to know what barriers existed for our patrons in moving to our temporary locations. What would motivate them to stay with us through the construction years? What competitive advantages existed at our temporary locations that were good selling points? How we could make the move less onerous? We tested messaging, sales strategies and tactics. From that, I learned a great many things. I learned that if our patrons got lost on their first trip to our new theaters, they wouldn't return. I learned that we had to make sure that parking and public transportation was readily available. I learned that dining options were incredibly important. From this, I spent months on signage plans. With the Crystal City Business Improvement District, we installed more than 100 new directional signs within a two mile radius of our temporary theater in Virginia. In coordination with the MidCity Business Association, we aggressively marketed the restaurants on U street and offered valet parking for every performance, as the neighborhood had very few parking options. We sent out <a href="http://arts-marketing.blogspot.com/2008/01/were-herewait-where-is-here.html">personalized websites</a> to each of our subscribers which among other things offered up step-by-step directions from their house to the new theaters. For these efforts, Arena Stage was recognized with the Box Office of the Year Award from INTIX and&nbsp;the Helen Hayes'&nbsp;Washington Post Award for Innovative Leadership in the Theatre Community. More importantly, we were budgeted to experience 7% attrition during the move and only realized 1.9% - and it all started with market research.<br /><strong></strong><br /><strong>Branding. </strong>Forget the high gloss, four color brochures that list your mission statement and vision. We all know that our brands, regardless of what we say, actually live in the minds and hearts of our customers. Over the years, I've almost always found a disconnect between what an institution thinks their brand is and what their customers view their brand as being. In 2008, Shugoll Research conducted a series of brand focus groups for Arena Stage. Only two years later, we would be opening the Mead Center for American Theater, so as a new marketing director, I wanted to test the current state of our brand before launching a rebranding campaign repositioning Arena Stage as a national center for American theater. Inside the company, it was clear to most at the time&nbsp;that Arena Stage was a home for American voices, something that Molly Smith had focused on since coming to Arena Stage in 1998. But when tested in focus groups, less than 20% of our subscribers and donors&nbsp;knew that we focused on American voices, and almost none of the single ticket buyers. We had to be much more aggressive in marketing our brand, so we developed a tag line ("Where American Theater Lives"), commissioned a series of spotlight articles on the American voices in each season, developed a new color palette which was a play off of red, white and blue, and eventually put the word "American" in our new logo and name. Two years later, we retested and found that more than 80% of those asked knew our American focus.<br /><br /><strong>Customer Service</strong>. As I've <a href="http://arts-marketing.blogspot.com/2011/11/customer-service-as-competitive.html">written about previously</a>, I view&nbsp;customer service as a very valuable competitive advantage. So, how&nbsp;is your organization doing? Beyond&nbsp;diligently tracking and responding to complaints,&nbsp;what are you doing to monitor customer satisfaction?&nbsp;We've hired Shugoll Research to&nbsp;develop and deploy&nbsp;customer satisfaction surveys, and benchmark us against peer organizations and ourselves for the past several years. I'm proud to report that we've received "industry leader" marks every year since 2008.&nbsp;&nbsp;But more importantly, each year we learn where we can improve, and we know where we should invest time and resources to improve our customers' experience. For example, in our first year in the new building, we received exceptionally high marks for our parking lot; we were delighted to see that our parking attendants were routinely going above and beyond to take care of our patrons. And the patrons noticed. That said,&nbsp;some of our elderly patrons reported that&nbsp;it was a challenge to walk up the ramp from the parking garage to the main lobby. So we responded by offering valet parking at the same price as standard parking for those who needed some extra assistance.<br /><br /><strong>Pricing. </strong>We spend a lot of time discussing pricing at Arena Stage. As marketers, we want to devise strategies that keep our institutions accessible to our communities all while developing price points that lead to sold-out houses. Get too aggressive with your prices, and your percent paid capacities will drop (hence why the <a href="http://www.nytimes.com/2013/02/27/arts/music/metropolitan-opera-to-reduce-ticket-prices-next-season.html?_r=0">Metropolitan Opera</a> announced that it would be lowering prices next year). But if your prices are too low, then you are leaving money on the table, something that most non-profit arts organizations can't afford to do in today's economic climate. So are you charging the right price for the right seat at the right time? To help us navigate pricing, we sought the assistance of <a href="http://www.trgarts.com/">TRGArts</a> and Shugoll Research. TRGArts created heat maps, advised us on the rescaling of our halls, and analyzed sales data to determine optimal price points. Shugoll Research conducted focus groups and surveys to determine price elasticity, and to procure feedback from customers. Did our patrons think we were over-priced? would they be willing to pay more for certain dates/times? what could we do to make our pricing more attractive to our patron base? One of the most interesting questions we ask is how satisfied patrons are with the value we provide. Each year we ask the question, our satisfaction ratings on value are in the "industry leader" range indicating that customers perceive that they are getting good value for the money they spend on a ticket. Something every marketing director loves to hear.<br /><br />The days of reading tea leaves, consulting the gods, and leaping into the unknown are over. A healthy combination of data analysis and market research allow modern day marketers to make informed strategic decisions. I for one am thankful, as I've never been particularly lucky when it comes to guessing. In decades past, I know I would have been fired.http://arts-marketing.blogspot.com/2013/03/what-if-you-didnt-have-to-guess.htmlnoreply@blogger.com (Chad M. Bauman)2tag:blogger.com,1999:blog-33812369.post-3348894941021639154Sun, 03 Feb 2013 19:46:00 +00002013-02-03T14:46:58.359-05:00The Subscription Equation (and other tactics) <span style="font-family: Calibri;">Probably the most frequent question I am asked is if I believe subscriptions are dying. <span style="mso-spacerun: yes;">&nbsp;</span>And if you would have asked me five years ago, I would have answered in the affirmative. I, like many others, believed the subscription model was outdated--a worn out old chestnut that needed to be replaced. I even had data to prove it. From our peak in 2002 until 2007, Arena Stage had lost 40% of its subscriber base! I was convinced we had held onto a failing business model for far too long, until I started testing alternatives.</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p><br /> <br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">In 2008, working with&nbsp;<a href="http://www.shugollresearch.com/">Shugoll Research</a>, we&nbsp;developed several focus groups with specific target audiences,&nbsp;including&nbsp;current subscribers, lapsed subscribers, multi-show buyers and single ticket buyers. During these focus groups, we presented several alternatives to the traditional subscription, many of which had been recently introduced by other theaters,&nbsp;and to my complete horror, none of them tested anywhere near as well as the traditional subscription. Even if I wanted to abandon our subscription model, I didn’t have any attractive alternative.<span style="mso-spacerun: yes;">&nbsp; </span>Then the realization came – if our customers still want subscriptions and our subscriber base is rapidly declining, then the way we sell, market and promote subscriptions if fundamentally flawed (it should be noted that we also tested satisfaction with artistic product and found that was not a challenge for us). In short, we were killing subscriptions.</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">As our 2012-13 season comes to a close, I’m happy to report that we have experienced significant increases in our subscription base for four consecutive seasons, almost achieving a record high number of subscribers and <span style="mso-spacerun: yes;">&nbsp;</span>since 2008, have increased our subscription revenue by 115%. Even more surprising, the turnaround started to occur in 2009 at the height of the global economic crisis and a full 1.5 years before the opening of the new Mead Center for American Theater.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">If I were to articulate the formula of our success, it would look like this:</span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">great artistic product + best seats + best price + outstanding customer service = more subscribers<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><u>Artistic Product</u>: Whether we like to admit it or not, the most important of the 4Ps of marketing is product. If your customers are not satisfied with the artistic product of your organization, you will not see an increase in your subscription base.</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><u>Best Seats at the Best Price</u>: Being able to get the best seats in the house at the best possible price is a powerful value proposition for subscribers.&nbsp;If you have a robust subscription base, often times the only way to get the best seats in the house is by subscribing. Make sure to message that in your sales materials. Also, be very careful of undercutting your subscriber average ticket price, particularly at the last minute. A substantial last minute discount may provide a lift to an under-performing production, but the long term side effects could be much worse.</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><u>Outstanding Customer Service</u>: Let’s be honest – customer service usually sucks these days. So it’s the perfect opportunity to shine. Steward your subscribers like development&nbsp;does their donors. Be proactive in finding ways to provide exceptional service. For example, if&nbsp;inclement weather&nbsp;is coming, instead of waiting for subscribers to call you to exchange their tickets, why not send them an email alerting them of the inclement weather and offering to make the exchanges on their behalf?</span><o:p><span style="font-family: Calibri;">&nbsp;And if you don't already, find ways to thank your subscribers throughout the year. For example, there is a theater on the west coast that partners with a winery each year to give their subscribers a free bottle of wine when they renew their subscriptions as a way of thanking them for their support.</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Beyond the formula, below are a couple of significant strategic changes we made that made all the difference:</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Lengthen the Subscription Campaign</b>: Prior to 2009, Arena Stage would announce its season in March and would continue to sell subscriptions until October, providing for an 8 month subscription campaign. These days we begin our subscription campaigns in January and sell through March of the&nbsp;following year, thereby lengthening our campaigns to 15 months. <span style="mso-spacerun: yes;">&nbsp;</span>Avoid delaying the start of your subscription campaign at all costs. Each week you lose will be very costly, and you cannot replace lost weeks.</span><b style="mso-bidi-font-weight: normal;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Don’t Forget About Upgrades: </b>When I was taught how to market subscriptions,&nbsp;I learned to break&nbsp;a subscription&nbsp;campaign into two parts: renewals and acquisitions. Today, we have an additional focus on upgrades.&nbsp;Our goal is no longer just to renew our subscribers; we want to upgrade them as well&nbsp;year after year. Primarily we focus on getting subscribers to increase the number of plays on their subscription, but you can also have them upgrade into better seats, add parking to their orders, or increase their annual fund donation. This year we are even experimenting with add-ons for café meals to great success. In FY13, almost ten percent of our subscription base&nbsp;upgraded into larger packages, which doesn’t sound like much until you consider that amounts to roughly $175,000 in additional revenue. On top of which, full season subscribers have a renewal rate 25 percent points higher and give donations that are 4 times larger than partial season subscribers.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Speak to Subscribers Like You Know Who They Are – Because You Do:</b> Gone are the days when you can create one beautiful season brochure that speaks to all of your patrons, and then mail it over and over again until you beat people into submission. Subscription renewals and solicitations should be highly targeted. You know what types of productions each patron likes and on what nights they like to attend. If you sell café meals and parking through your box office, you even know if they like to park and what they like to eat. You know if they are a full price or discount buyer, how many shows they attend a year on average, and how many people are usually in their party. So why are we still wedded to one size fits all solicitations? Our job is to get the right offer in front of the right prospect at the right time. And we have all the data we need to accomplish that.</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Develop a Sales Pipeline. </b><span style="mso-spacerun: yes;">&nbsp;</span>Even up to a few years ago, we would mail subscription solicitations to traded lists. Then we started to look closely at our response and tracking reports. Guess what – we found that list trades were not working, not even close. It would have been just as effective to drop season brochures out of a helicopter over the city. And this was considered a “best practice” that every major arts organization in the city bought into.&nbsp;However, we were not&nbsp;measuring efficacy. The failure of these campaigns is easy to understand. In short, we were asking people to marry us before&nbsp;we went on a first date. Most of these targets had never seen a show at Arena Stage. Why would they invest hundreds of dollars when they had never stepped through our front doors? We changed tactics and concentrated our efforts on developing a sales pipeline. We would trade lists for single tickets, primarily to our most popular productions. This in turn would create an influx of new single ticket buyers. Once they had their first experience at Arena Stage, we would send them an offer to return to a second show. Once a patron had seen two or more shows, the likelihood that that would then respond to a subscription solicitation quadrupled. Don’t waste time and money mailing to poor prospects. Instead concentrate your resources on developing more multi-show buying patrons as those will be your best leads in your next subscription campaign.</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Testing and Failing. </b>The only way to succeed is to fail. The key is to succeed on a grand scale, and fail on a small one. Aggressively measure the success of every campaign, no matter how small. And test something new at least every week. Tactics will change from year to year, and you’ll need to adjust in order to maximize return on investment. As we doubled our subscription revenue over the past four years, we actually started to <u>spend less</u> as we grew more efficient. For example, I like to test new offers in our telesales room. Over the period of a week, we may have three or four offers in the telesales room. By the end of the week, after a thousand or so calls, we usually have a clear winner among the offers tested. That offer is then rolled out in an email solicitation, and if it responds well, then we’ll include the offer in a large direct mail campaign and then test it against the current control package to see if we achieve a better ROI.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">If you are currently experiencing less than stellar results on your subscription campaign, before throwing the baby out with the bathwater, I’d encourage you to examine each of the variables in the subscription&nbsp;formula above, and then vary your tactics to see if you get better results.<span style="mso-spacerun: yes;">&nbsp; </span>Sometimes it isn’t the model that is dying, it is how we apply the model that is responsible for our underwhelming results. At least it was in our case.</span></div>http://arts-marketing.blogspot.com/2013/02/the-subscription-equation-and-other.htmlnoreply@blogger.com (Chad M. Bauman)2tag:blogger.com,1999:blog-33812369.post-8773869499833776647Sun, 16 Dec 2012 19:49:00 +00002012-12-16T14:59:49.939-05:00I have a hit! Should I extend?<span style="font-family: Calibri;">As I have <a href="http://arts-marketing.blogspot.com/2012/09/good-intentions-can-interfere-with.html">written about previously</a>, often times marketers get themselves into trouble because they focus too much of their attention on under-performing productions causing them to ignore opportunities to better capitalize on productions which are over-performing.</span><br /><br /><span style="font-family: Calibri;">So, now you have a hit on your hands, and you know you have to strike while the iron is hot. Sometimes hit productions can be few and far between, so what you do next could make or break your season. When a hit does occur, many entrepreneurially minded non-profit producers start to consider an extension to their previously announced runs. Before announcing an extension, here are a couple of things you should consider:</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Feasibility. </b>Is it even possible to extend your run? Oftentimes non-profit subscription houses have another show coming in right on the heels of the previous one, and there is no room to extend. Are your actors available for an extension? Many times actors have other projects already lined up, and they are unavailable for an extension. And if some actors are unavailable, can you continue a run with replacement actors?&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Extension Costs. <span style="mso-spacerun: yes;">&nbsp;</span></b>How much will it cost per week to run an extension? Make sure that you include all relevant costs, such as:<o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l1 level1 lfo1; text-indent: -0.25in;"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span style="font-family: Calibri;">Casting and put-in costs for replacement actors</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l1 level1 lfo1; text-indent: -0.25in;"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span style="font-family: Calibri;">Any increases in fees due to extension clauses</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l1 level1 lfo1; text-indent: -0.25in;"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span style="font-family: Calibri;">Marketing and press fees to promote an extension</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l1 level1 lfo1; text-indent: -0.25in;"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span style="font-family: Calibri;">Applicable overhead costs such as house management, box office, etc.</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l1 level1 lfo1; text-indent: -0.25in;"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span style="font-family: Calibri;">Cost of sales fees such as credit card service charges</span></div><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 0pt 0.5in; mso-list: l1 level1 lfo1; text-indent: -0.25in;"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span style="font-family: Calibri;">Increases in royalty payments<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">The higher the weekly operating costs, the more risky an extension will be. The decision to extend a popular play with a modest cast size will be much easier than the decision to extend a large musical, which can have weekly operating expenses 4 to 5 times higher than a play.</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Current Sales and Inventory. </b>How many tickets did you sell in the previous couple of weeks and how much in single ticket revenue did you realize? Even if you are currently achieving more revenue in single ticket sales than what you are projecting as your weekly operating costs for an extension, it may not be a good decision to extend. For example: production X has sold 2,000 single tickets for $100,000 in single ticket revenue per week for the past three weeks. You have projected that your weekly operating costs for an extension will be $80,000 per week, leaving a $20,000 positive differential between current weekly revenues and projected weekly operating costs leading you to believe an extension is advisable. But, when you take a look at your available inventory for the remaining 6 weeks of your run, you notice that you have 18,000 tickets left to sell in your 1,000 seat theater. Selling at a pace of 2,000 tickets per week with 6 weeks left, you will sell 12,000 additional tickets which represents only 67% of your remaining inventory. In this situation, it may not make sense to extend, as you could avoid additional extension costs and maximize net revenue by selling out your remaining inventory.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;[note to reader: I chose to use&nbsp;relatively large&nbsp;round numbers as the arithmetic is easier, and they illustrate&nbsp;arguments in a more succinct manner. These concepts are easily scalable for smaller or larger houses.]</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Burn and Sell Ratio. </b>Are you&nbsp;realizing more in single ticket revenue for future performances than you are burning off each week? For example, in your 1,000 seat theater with an average ticket price of $50 and a 60% paid capacity for a performance schedule&nbsp;with 8 shows per week, you will burn off $240,000 in ticket revenue each week of performance. If you are selling more than $240,000 each week for future performances, and your weekly operating expenses for an extension are below $240,000, it is a good indication that an extension is viable.</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Time to Sell. <span style="mso-spacerun: yes;">&nbsp;</span></b>If you decide to extend a run in your 1,000 seat theater for an additional week, with an 8 show per week schedule, you will bring an additional 8,000 seats online to sell. Do you have adequate lead time to sell the extension? If you have relatively low weekly operating costs, the financial risk may be low, but you don’t want to announce an extension only to play to 30-40% paid capacity because you didn’t have enough time to adequately promote it.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Other random thoughts…<o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo2; text-indent: -0.25in;"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span></span></span><span style="font-family: Calibri;">Extending a popular production can ensure an influx of new patrons, which can lead to an abundance of excellent leads to develop new multi-show ticket buyers. That said, scarcity can also be a very valuable marketing tool. Nothing encourages early ticket buying behavior better than sold out houses.</span></div><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo2; text-indent: -0.25in;"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span></span></span><span style="font-family: Calibri;">Extensions are not always extensions. Some theaters have developed business models which involve “extending” almost every show they produce. At other theaters, extensions are very rare. Why is this? For those that always seem to have extensions, most “added performances” are likely built-in and planned as part of their original&nbsp;run lengths, but tickets are held off sale until a predetermined date, thereby creating the perception that when tickets are placed on sale, the production has indeed extended. It’s quite a clever marketing strategy until you go to the well too many times, and the public starts to understand what’s going on. At which point, I would guess that marketing a production as “just extended” starts to lose some of its value. </span></div>http://arts-marketing.blogspot.com/2012/12/i-have-hit-should-i-extend.htmlnoreply@blogger.com (Chad M. Bauman)0tag:blogger.com,1999:blog-33812369.post-8934286592183466651Sat, 17 Nov 2012 19:38:00 +00002012-11-17T14:38:31.023-05:00Is Your Organization Fun?<span style="font-family: Calibri;">Last weekend was my annual pilgrimage to the <a href="http://www.artsmarketing.org/conference/2012/social-media">National ArtsMarketing Project Conference</a> hosted by Americans for the Arts. It has become my favorite conference of the year, not only because I get to catch up with friends from all over the country, but because it reminds me that sometimes the most profound marketing decisions are the most basic ones.</span><br /><br /><span style="font-family: Calibri;">I attended a session entitled “<a href="http://www.artsmarketing.org/conference/session/2012/curated-arts-experience">The Curated Arts Experience</a>” featuring <a href="https://twitter.com/CeciDadisman">Ceci Dadisman</a>, <a href="https://twitter.com/deekshagaur">Deeksha Gaur</a> and <a href="https://twitter.com/spinstripes">Nella Vera</a>. During this session, Nella started talking about something really fundamental – having fun. She gave several great examples of organizations that went out of their way to create fun and memorable experiences for their audiences. Immediately prior, we were treated to a lunch session featuring <a href="http://www.cdzamusic.com/">cdza</a>, a trio of guys who create musical experiments.<span style="mso-spacerun: yes;">&nbsp; </span>With their experiments, they make classical music fun and accessible, and in doing so have millions of viewers worldwide. I have to wonder how many people have been introduced to classical music via their performances? </span><br /><br /><span style="font-family: Calibri;">Cdza’s success is really pretty simple:<o:p></o:p></span><br /><br /><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">1)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span style="font-family: Calibri;">They feature the work of brilliant artists – Michael Thurber is the “chief music guy,” a young man who from age 14 spent his life in a music conservatory and graduated from Juilliard. </span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">2)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span style="font-family: Calibri;">They don’t take themselves too seriously</span></div><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">3)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span style="font-family: Calibri;">They create memorable and fun experiences</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Their motto: “first build your audience by offering them dessert before you introduce vegetables.” Simple. Clear. Brilliant.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">In </span><a href="http://arts-marketing.blogspot.com/2012/01/art-or-audience-chicken-or-egg.html"><span style="color: blue; font-family: Calibri;">previous blog posts</span></a><span style="font-family: Calibri;">, I’ve mentioned that when building audiences, you must program “gateway drugs” – a couple of options that are easily accessible and offer up a fun evening of entertainment in an attempt at proving that the non-profit arts can be a&nbsp;viable entertainment alternative to audiences that currently don’t view them as such. Great art doesn’t have to be devoid of entertainment value. It is possible to have art of the highest quality that is fun.</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Earlier this week, <a href="http://www.missionparadox.com/the_mission_paradox_blog/2012/11/getting-along-fine-without-you.html">Adam Thurman of Mission Paradox</a> reminded us that we need new audiences more than they need us. And here’s the painful truth – since art is essential to our lives, we like to believe that they are essential to everyone. That just isn’t the case. A good amount of the population does just fine without the arts. That isn’t to say that I believe the arts couldn’t enrich their lives, it is merely meant to point out that in the hierarchy of needs, we’re closer to the bottom. In today’s economy, merely meeting basic existence needs has become difficult, so convincing someone to spend their remaining disposable income on a discretionary item like the arts is harder than ever.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">We have to make our organizations inviting, accessible and fun. And understand that providing a fun experience doesn’t equate to sacrificing artistic credibility. We don’t have to sacrifice the core of who we are to attract new audiences, and those that make that argument, in my opinion, are short-sighted.</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">New audiences need to be cultivated carefully. Create a path for them. Give them an easy entry point. Provide an amazing experience. Steward them so they return soon after their first experience. Build their confidence with multiple experiences, and then provide an opportunity to sample something a little more challenging. Introduce them to new experiences. At some point, if you don’t provide them with&nbsp;a challenge, they will grow bored. We are responsible for cultivating our audiences’ artistic growth. If we lack audiences for classical, challenging or new work, perhaps it is because we try to short circuit the system, and ask that new audiences sample what they would at first perceive as vegetables before getting to the dessert.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">In some circles in Washington, DC, the Kennedy Center has been criticized for programming work that isn’t as challenging as some would like. I however, appreciate the role the Kennedy Center plays in our ecosystem. Each year they introduce thousands of people to the performing arts for the first time. This in turn acts as a feeder system to other arts organizations.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">A balanced meal is important, but so too is the order of consumption. Start with dessert, and the chances increase that the full meal will be finished. Roll out complex foods to a novice palate, and you may not make it past the first course.&nbsp;</span></div>http://arts-marketing.blogspot.com/2012/11/is-your-organization-fun.htmlnoreply@blogger.com (Chad M. Bauman)0tag:blogger.com,1999:blog-33812369.post-6639393177351630664Sun, 21 Oct 2012 14:24:00 +00002012-10-23T12:17:18.717-05:00The Plight of the Newspaper (and Preparing for the Future)<span style="font-family: Calibri;">A couple of years ago, I was speaking at a conference and someone from the audience asked me what I believed to be the biggest marketing challenge of the next five years. I answered with the death of the newspaper, which surprised many, who thought I would point to declining subscription bases or overall drops in arts participation.<span style="mso-spacerun: yes;">&nbsp; </span>We had just experienced the death of four major newspapers – the <i>Seattle Post Intelligencer</i>, the <i>Rocky Mountain News</i>, the <i>Tucson Citizen</i> and the <i>Christian Science Monitor</i> – at a time when most non-profit arts organizations had important symbiotic relationships with their hometown newspapers.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">So let me pause to ask – if your newspaper were to go out of business today, how would that impact your organization?&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">And here’s why I am asking. According to the <a href="http://www.naa.org/">Newspaper Association of America</a> (NAA):</span></div><br /><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span></span></span><span style="font-family: Calibri;">Total print advertising has dropped from $47.4 billion in 2005 to $20.6 billion in 2011 – the lowest print advertising has been since 1983 (not factoring for inflation).</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span></span></span><span style="font-family: Calibri;">In 2011, the total daily circulation of all the newspapers in the United States was 44.4 million, the lowest on record since 1940.</span></div><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span></span></span><span style="font-family: Calibri;">Citing a 2010 Scarborough report for adults 18+, 47% of the U.S. population 35 years and older read an average issue of a daily newspaper in comparison to only 26% of the population under 35. <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">According to <a href="http://pewresearch.org/databank/dailynumber/?NumberID=1191">The Pew Research Center</a>, since 2003, the Internet has been on par or more popular than newspapers as a news source, and currently just 21% of young&nbsp;adults&nbsp;report newspapers as their primary source of news. As the Internet has become increasingly popular as a news source, newspapers have invested tremendous amounts of resources in building their online presence, but here’s the problem – for every </span><a href="http://www.bloomberg.com/news/2012-03-19/newspapers-lose-10-dollars-in-print-for-every-digital-1.html"><span style="color: blue; font-family: Calibri;">$1 gained in online advertising, newspapers lost $10</span></a><span style="font-family: Calibri;"> in print advertising in 2011. And the reason? In print advertising, newspapers are dominate, but online, they compete in a very crowded marketplace, where Google and Facebook combined will share just under </span><a href="http://www.emarketer.com/newsroom/index.php/google-display-ad-leader/"><span style="color: blue; font-family: Calibri;">30% of total online display advertising revenue</span></a><span style="font-family: Calibri;"> in 2012.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Using the statistics provided online by the NAA, in 2005 1,452 daily newspapers shared $47.4 billion in print advertising for an average of $32.6 million in print advertising per daily paper. Six years later, 1,382 daily newspapers shared $20.6 billion in print advertising for an average of $14.9 million in print advertising per daily paper.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">In six years, the average daily newspaper lost more than 50% of its print advertising revenue, placing in jeopardy the entire business model of most newspapers and leading to drastic changes. Newspapers around the nation are slashing their newsrooms, laying off veteran reporters and in the best case scenarios, replacing them with freelance reporters with little experience. In worst cases, they aren’t replaced at all.&nbsp;</span><o:p><span style="font-family: Calibri;">&nbsp;Just recently the theater world received news that veteran <i>Philadelphia Inquirer</i> arts writer and&nbsp;critic <a href="http://blogs.phillymag.com/the_philly_post/2012/10/12/philadelphia-inquirer-theater-critic-howard-shapiro-takes-buyout/">Howard Shapiro</a>, after 42 years with the paper, was reassigned to cover South New Jersey in what seemed like an attempt to make him miserable enough to leave. And it looks like it worked.</span></o:p></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">With fewer reporters and less experience, not only has coverage decreased, but quality has diminished as well.<span style="mso-spacerun: yes;">&nbsp; </span>Many of us shook our heads when a small online magazine named <i style="mso-bidi-font-style: normal;">Pasadena Now</i>hired </span><a href="http://en.wikipedia.org/wiki/Pasadena_Now"><span style="color: blue; font-family: Calibri;">two writers in India to cover local events</span></a><span style="font-family: Calibri;"> but just recently we’ve learned of </span><a href="http://www.financial-news.co.uk/6208/2012/07/us-newspapers-increasingly-outsource-journalism-to-the-philippines/"><span style="color: blue; font-family: Calibri;">Journatic,</span></a><span style="font-family: Calibri;">a company that outsources journalism to the Philippines for US newspapers. <span style="mso-spacerun: yes;">&nbsp;</span>Others have transitioned from primary reporting to aggregating content from other news sources and then providing commentary on the aggregated material. When I was at the Smithsonian, one such company drew inaccurate conclusions by providing editorial on aggregated stories. When I called to tell them of the inaccuracies and offer to set up interviews so they could report on the story directly, the freelance writer told me they didn’t pay him enough to do any original reporting. Unfortunately for us, other outlets picked up his story. <span style="mso-spacerun: yes;">&nbsp;</span>I understand cutting as much fat as possible from budgets during tough economic times, but at some point, there isn’t any fat left, and what remains is only muscle. Cutting further sacrifices your ability to deliver an excellent product, which is why I advise arts organizations to avoid cutting investments in the artistic product itself if at all possible when making budget adjustments.<span style="mso-spacerun: yes;">&nbsp; </span>By sacrificing quality, I’m afraid newspapers could be pouring gas on an already blazing fire.<span style="mso-spacerun: yes;">&nbsp;&nbsp;</span></span><o:p><span style="font-family: Calibri;"> </span></o:p><br /><o:p><span style="font-family: Calibri;"><br /></span></o:p></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><o:p><span style="font-family: Calibri;">Every great arts city has a great newspaper. Every great theater town, a well respected critic. If your city is affected by cuts to arts coverage, let your voice be heard. Activate your bases. Support outlets with&nbsp;extensive arts&nbsp;coverage with your advertising dollars. That said</span></o:p><span style="font-family: Calibri;">, I advise non-profit arts organizations to prepare themselves for the possibility that their local newspaper could go out of business. <span style="mso-spacerun: yes;">&nbsp;</span>Cultivate relationships with bloggers, social media mavens and other influentials in your community. Develop online communities where your audiences can speak to one another. Produce and distribute original content yourself. Diversify your advertising strategies. Budget resources to grow your database. Hopefully these efforts will be for naught, but if the day comes that your local newspaper declares bankruptcy, you’ll be better prepared.</span></div>http://arts-marketing.blogspot.com/2012/10/the-plight-of-newspaper-and-preparing.htmlnoreply@blogger.com (Chad M. Bauman)0tag:blogger.com,1999:blog-33812369.post-6754122437780534670Sun, 23 Sep 2012 20:06:00 +00002012-12-02T21:46:12.173-05:00Good Intentions Can Interfere with Success<div class="separator" style="clear: both; text-align: left;"><a href="http://2.bp.blogspot.com/-jVV9eFy2WVs/UF9omH_JUHI/AAAAAAAAAOc/SZef-NNPbK8/s1600/hardsmart.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a><br /></div><a href="http://2.bp.blogspot.com/-jVV9eFy2WVs/UF9omH_JUHI/AAAAAAAAAOc/SZef-NNPbK8/s1600/hardsmart.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="186" src="http://2.bp.blogspot.com/-jVV9eFy2WVs/UF9omH_JUHI/AAAAAAAAAOc/SZef-NNPbK8/s320/hardsmart.jpg" width="320" /></a>To say that these are challenging times for non-profit arts organizations is probably an understatement. We're still struggling with the after effects of the global economic crisis. Previously viable business models are imploding.&nbsp;The elimination or severe reduction in government funding has resulted in a very quick need to replace public support with private funds.&nbsp;And who knows what is around the corner.<br /><br />But, artists and arts administrators are a resilient bunch. One of our strengths is our never say die attitude. We confront each challenge head on in a "show must go on" fashion. We are inherently hard working. To make it in this field requires&nbsp;years of rebounding from rejection. When the going gets tough, we redouble our efforts.<br /><br />After years of struggle, the fight in us undoubtedly begins to&nbsp;wane, as we contemplate the permanency of the current climate. And this isn't necessarily a bad thing. In moments of crisis, we ring the alarm and all hands arrive on deck to face the upcoming challenge, but this response is unsustainable for years on end. After downsizing, one human being can only do the work of three for so long before collapse. Our initial reaction of working stronger, harder and faster must give way to working smarter. <br /><br />In the past&nbsp;few months, I've seen a couple of instances where hard working marketing departments, desperate to keep their heads above water, were working well beyond capacity, but were resistant to taking measures to improve efficiency for fear that if they took any time away from their current tasks, they would risk imminent financial peril. All while knowing that the current situation was unsustainable, they continued each day just like the prior, hoping that the financial climate would improve before they hit the point of exhaustion. <br /><br />But for those already at the point of exhaustion, I'd like to offer up a few quick suggestions to improve efficiency in hopes of lightening the load:<br /><br /><strong>Maximize Success to Minimize Risk.</strong> Often times marketing departments get into trouble when they have one business line or product&nbsp;performing very well, and a couple of others underperforming. Our natural instinct is to abandon the overperforming&nbsp;product in order to focus our attention on improving the underperforming others. Please don't do this. If you are understaffed and under-resourced (and who isn't), where and how you use your limited resources is incredibly important.&nbsp;If you&nbsp;reappropriate resources to&nbsp;aid underperforming&nbsp;products, at best you will most likely&nbsp;see minimal results, whereas if you applied your resources to the overperforming products, your returns could be exponentially better. High tech firms have built incredibly successful business models off of failure. They expect a very high percent of their products in development to fail, banking on the revenues from the one or two that will take off. And when a product does hit, the entire efforts of the company are focused on maximizing results. A good rule of thumb - spend 75% of your efforts on improving the results on overperforming products, and 25% on improving underperformance. All too often, we do the opposite, thinking that helping struggling products is what is best for the organization.<br /><br /><strong>Analysis &amp; Measurement, Before Action. </strong>Just a few weeks ago, I was in a meeting with a senior marketing executive in charge of a sizable national advertising campaign. He had a hunch that he was under-promoting a certain section of his business in the New York market, and had set aside a significant amount of money to test&nbsp;a new print campaign in New York dailies. When I understood what he was trying to accomplish, I asked him how he would measure success. He responded by saying that it was very hard to measure the exact outcomes of his new campaign, and besides, with his reduced staff and resources, he was doing his best just to get the campaign done and out the door. This is a common occurrence. When resources are cut, one of the first things to go is analysis, tracking, reporting and measurement. But when looking to work smarter, the one thing you need is what you have just cut. Before launching any major marketing campaign, make sure you have the tools in place to track results, analyze sales and measure success. Over the years, I have had more than one staff member get frustrated with me when I asked them to set aside the time they would normally spend promoting a production in order to create more sophisticated reporting tools. But without clear and reliable data, your campaigns will never improve, and if you do see an uptick, you won't be able to replicate what worked. <br /><br /><strong>Don't Save Your Way to Trouble. </strong>Several months ago, I visited a client that was deep into their subscription campaign. The campaign was going well, but the company was financially struggling for other reasons. The marketing director, being incredibly conscientious, thought that every dollar saved, was a dollar earned for the company, and started to decrease the amount of money he spent on his subscription campaign in order to come significantly under his budgeted expenses. He wanted to save, and give back the money in order to help the company. His intentions were admirable, but his plan would have placed the company in an even worse financial position. His cost of sales reports were showing that for every dollar he spent on the subscription campaign, he was selling five dollars worth of subscriptions. This wasn't the time to under-invest, in fact, this was the perfect opportunity to spend more if cash flow allowed. If your cost of sale is below $1, for every dollar you don't spend, you place your company at additional risk. You only want to consider cutting your marketing expenses if your campaigns are resulting in negative net revenue, and even&nbsp;then, it is risky if you are <a href="http://arts-marketing.blogspot.com/2012/04/purposeful-acquisition.html">cutting acquisitions.</a> <br /><br />Sometimes working smarter means doing the opposite of what's intuitive. Have the courage to challenge systems, the ability to measure results and the good fortune to discover efficiencies. http://arts-marketing.blogspot.com/2012/09/good-intentions-can-interfere-with.htmlnoreply@blogger.com (Chad M. Bauman)0tag:blogger.com,1999:blog-33812369.post-5857998595693066932Sun, 09 Sep 2012 23:58:00 +00002012-09-09T20:43:41.181-05:00The Law of the Few (and the Future of the Many)About a year ago, I began designing&nbsp;a <a href="http://www.american.edu/cas/arts-management/arts-management-technology-certificate.cfm">graduate certificate program</a> for American University focused on&nbsp;technology issues&nbsp;in&nbsp;arts management,&nbsp;and this past summer, I taught my first course&nbsp;focused on the intersection of technology and marketing.&nbsp;To open the course, I&nbsp;asked&nbsp;students to&nbsp;read Malcolm Gladwell's <em><a href="http://www.american.edu/cas/arts-management/arts-management-technology-certificate.cfm">The Tipping Point</a></em>, which if you haven't read it, describes how social epidemics evolve, providing a great platform to discuss word-of-mouth marketing and how technology can be used to ignite a movement. <br /><br />Early in the book,&nbsp;Gladwell discusses "The Law of the Few," which boiled down is a riff on the 80/20 principle -&nbsp;20% of the people are responsible for 80% of the work. As marketers, we latch onto this principle, as it correctly argues that if we can identify and cultivate relationships with&nbsp;a select&nbsp;group of influential people called "connectors," then our returns can be maximized. One connector can be worth his weight in gold, and easily as valuable as ten non-connectors.<br /><br />As I was giving my lecture, it struck me that most non-profit arts organizations have designed their business models on the "Law of the Few" principle, not just in their approaches to marketing, but in how we program, fundraise and communicate. A previous supervisor of mine used to say that a grassroots movement begins with the grasstops. But if we are all focused on the few, are we ignoring the many? <br /><br />I ask this question, because as society shifted away from a one way,<a href="http://en.wikipedia.org/wiki/Web_1.0"> web 1.0</a>&nbsp;world towards an interactive,&nbsp;<a href="http://en.wikipedia.org/wiki/Web_1.0">web 2.0</a> one, the ways in which we do business and view the world radically changed. Previously&nbsp;companies&nbsp;had much more&nbsp;control&nbsp;of their&nbsp;brands as they could carefully craft messaging, but&nbsp;today,&nbsp;brands have a life of their own in the virtual universe. We used to seek out&nbsp;experts when we needed information, now we rely upon the collective&nbsp;of Wikipedia or Google (when was the last time you consulted an encyclopedia?). At one time knowledge was proprietary,&nbsp;but presently, a growing number of&nbsp;us look to the commons (and&nbsp;companies trying to maintain business models built upon charging for knowledge are struggling). We used to rely on authority figures&nbsp;to inform us,&nbsp;but now in moments of crisis, millions flock to Twitter, where we learned an hour before&nbsp;President Obama confirmed it that Osama Bin Laden had been killed.<br /><br />I believe that many of us used to defer to the knowledge and experience of a small few,&nbsp;placing trust in their&nbsp;expertise to guide the rest of us. But when a handful of very powerful and experienced bankers&nbsp;plunged the world into a global economic crisis resulting in the loss of 40% of the world's wealth, the masses started to wonder if the few could be trusted to lead. In the web 1.0 world, most were passive recipients, willing to receive content as delivered. Today, the least among us&nbsp;now demands&nbsp;a seat at the table, and via web 2.0 technologies, an even playing field has begun to emerge.<br /><br />So how will this affect the non-profit arts? Here are just a couple of examples:<br /><br /><strong>The Citizen Critic (and the Future of Arts Journalism)</strong><br />A couple of weeks ago, Barry Hessenius, former director of the California Arts Council, issued his <a href="http://blog.westaf.org/2012/08/2012-fifty-most-powerful-and.html">annual list</a> of the most influential people in the arts. On the list were a handful of notable bloggers, including <a href="http://www.fracturedatlas.org/site/bios/staff/20/Ian%20David_Moss">Ian David Moss</a>, <a href="http://www.artsjournal.com/jumper/">Diane Ragsdale</a>, <a href="http://www.artsjournal.com/newbeans/">Clay Lord</a>,&nbsp;<a href="http://www.artsjournal.com/diacritical/">Doug McLennan</a> and <a href="http://www.thomascott.com/">Thomas Cott</a>, however&nbsp;not a single&nbsp;traditional journalist was&nbsp;mentioned as there wasn't a category for journalists.&nbsp;Was this an oversight, or a trend? <a href="http://socialcommercetoday.com/word-of-mouth-still-most-trusted-resource-says-nielsen-implications-for-social-commerce/">Nielsen recently reported</a> that 92% of consumers trusted word-of-mouth from friends and family, while only 58% trusted editorial content such as newspaper articles. <a href="http://litreactor.com/news/amazon-customer-ratings-vs-professional-book-critics">Harvard University</a> recently published a study that contended that average reader reviews on Amazon.com were just as trustworthy as book reviews from professional critics. Even <a href="http://artworks.arts.gov/?p=8692">Maura Judkis</a>, a writer for the <em>Washington Post</em>, in her article for the NEA's blog ArtWorks states "readers of my generation, the Millennials, are more likely to want to see a movie or play because their friends like it than because a critic does."&nbsp;Word of mouth has always been powerful, but advances in technology have allowed connectors to broadcast their thoughts to followers instantaneously, and others, the opportunity to feed into social networking, user review sites like Yelp.com. So where does that leave us? Ask yourself - if you were visiting New York, and thousands of patrons had described a Broadway play positively in online reviews, would it have more of an impact on you than negative reviews by&nbsp;professional critics? [could this explain the mysterious success of <a href="http://blogs.hbr.org/cs/2012/08/the_turnaround_that_kept_spider_man.html">Spiderman</a>?]<br /><br /><strong>Crowdfunding and Microfinancing</strong><br />In her article "<a href="http://hyperallergic.com/56248/it-is-broke-we-should-probably-fix-it-the-nonprofit-model-and-the-arts/">It is Broke, We Should Probably Fix It</a>," Alexis Clements argues that many non-profit organizations chase a few, large foundations, whose money would have been public via taxation but is now controlled privately. She goes on to say that via grants from private foundations, wealthy individuals can "funnel money to organizations that will uphold their personal beliefs."&nbsp;That is a pretty charged statement, but I do wonder&nbsp;how often arts organizations manipulate their missions in order to receive a large grant or donation from a private funding source? How many arts organizations are alive today primarily due to the generosity of one or two major donors, and for those, do the donors in question wield too much influence? In 2008, President Obama demonstrated the power of the collective when he raised unprecedented amounts of money from small donations. As of August, the&nbsp;crowd funding website&nbsp;<a href="http://en.wikipedia.org/wiki/Kickstarter">Kickstarter</a> has raised $275 million in funding for projects, and has grown&nbsp;exponentially since its founding in 2009. And we aren't just talking about tiny amounts of funding either. The top 10 projects funded on Kickstarter all raised more than $1 million. And Microfinance website <a href="http://www.kiva.org/about">Kiva</a> has&nbsp;leveraged $346 million in&nbsp;funds&nbsp;from 823,474 lenders to launch projects aimed at combating poverty&nbsp;in 63 different countries. <br /><strong></strong><br /><strong>Crowdsourcing Curation and Programming</strong><br />When I was at the Smithsonian, an internal debate was occurring about the "<a href="http://americanart.si.edu/exhibitions/archive/2012/games/">Art of Video Games</a>" exhibit at the American Art Museum. The Smithsonian invited the public to help curate which video games would be featured in the exhibit, and in doing so, more than 3.7 million votes were cast by 119,000 people in 175 countries. Pretty impressive. However, questions began to arise about the role of the curator. For the most part, non-profit arts organizations are lead by artists with extensive training and sometimes decades of experience. As the resident experts in their fields, they are regularly called upon to make value judgements on what art to present, and how to present it. In the past, the public has remained a passive receiver of said art, but a growing number of patrons today would like to play a more active role. Technology has changed what used to be a one way conversation into a dialogue, and in turn, many community stakeholders now expect to be able to exercise their voice. I believe this phenomenon prompted <em>Arts Journal</em> editor Doug McLennan to host the "Lead or Follow" debate early this year. If you didn't catch it, here is a <a href="http://www.artsjournal.com/leadorfollow/">good recap</a>. <br /><br />Understandably, non-profit arts organizations have built models based on the "Law of the Few," and I am not advocating for the abandonment of those models. I am however&nbsp;suggesting that there is wisdom, money and resources to be found in the collective as well. This isn't an either/or proposition between the few and the many; it's a both/and situation.&nbsp;There is a significant role to play for the few and the many.&nbsp;But to tap into the collective, I believe we must become vital and essential&nbsp;to our communities again. I fear that for many non-profit arts organizations, if they were to disappear, we'd barely hear a whimper, when there should be protests in the streets.http://arts-marketing.blogspot.com/2012/09/the-law-of-few-and-future-of-many.htmlnoreply@blogger.com (Chad M. Bauman)2tag:blogger.com,1999:blog-33812369.post-4047160250734545366Wed, 22 Aug 2012 12:20:00 +00002012-08-22T07:20:55.973-05:00The Myth of the Ubiquitous Solution<br /><span style="font-family: Calibri;">Today I tread lightly into the “new models” discussion which has recently been at the forefront of chatter among arts managers. For a good recap, please read the following:</span><br /><span style="font-family: Calibri;"><br /></span><span style="font-family: Calibri;">“<a href="http://online.wsj.com/article/SB10000872396390444508504577593073546227962.html">Why Arts Managers Short of Cash Are Looking at Detroit</a>,” by Terry Teachout, The Wall Street Journal<br />“<a href="http://www.washingtonpost.com/entertainment/theater_dance/theaters-look-for-new-ways-to-draw-in-subscriptions/2012/08/08/b821bad0-dd98-11e1-8ad1-909913931f71_story.html">Theaters Look for New Ways to Draw in Subscribers</a>,” by Nelson Pressley, The Washington Post<br />“<a href="http://www.huffingtonpost.com/michael-kaiser/the-new-model-part-2_b_1623893.html">The New Model, Part 2</a>,” by Michael Kaiser, The Huffington Post<br />“<a href="http://www.fracturedatlas.org/site/blog/2012/06/19/swimming-downstream-in-the-current-of-history/">Swimming Downstream in the Current of History</a>,” by Adam Huttler, Fractured Atlas Blog</span><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;"><br />As Michael Kaiser states “the world is changing – but it has always been changing.” I agree with Mr. Kaiser to a point, but I’d like to point out that the amount of change organizations have faced in previous decades probably pales in comparison to the change they have confronted in the past ten years. In a one decade, pretty much everything we have been taught is now in question. How many of us were taught that the key to financial stability was saving money in order to purchase a house? For those of us who purchased prior to 2007, becoming a homeowner could be the dumbest financial decision we make in our entire lives. Who knew that we would experience a global economic crisis so severe that it would destroy </span><a href="http://www.fas.org/sgp/crs/misc/RL34742.pdf"><span style="color: blue; font-family: Calibri;">40% of the world’s wealth</span></a><span style="font-family: Calibri;">, or that people would actually&nbsp;opt for&nbsp;negative investment returns in order to move monies into safer investment vehicles? For the first time in the history of the United States,&nbsp;Standard &amp; Poors <a href="http://en.wikipedia.org/wiki/United_States_federal_government_credit-rating_downgrade,_2011">downgraded</a> the credit rating of the federal government to below AAA status, and&nbsp;the </span><a href="http://www.thedailybeast.com/newsweek/2009/10/13/a-path-to-downward-mobility.html"><span style="color: blue; font-family: Calibri;">youngest Americans will most likely be worse off than their parents</span></a><span style="font-family: Calibri;">.&nbsp;Staples of American life, such as <a href="http://www.businessweek.com/articles/2012-03-06/goldman-sachs-social-security-and-medicare-are-weaker-promises-than-debt">Social Security and Medicare</a>, seem to be imploding, and&nbsp;new college graduates are entering the work force with <a href="http://www.nytimes.com/2012/05/13/business/student-loans-weighing-down-a-generation-with-heavy-debt.html?pagewanted=all">record high student loans</a>. <span style="mso-spacerun: yes;">&nbsp;</span><span style="mso-spacerun: yes;">&nbsp;</span>And this is to say nothing of the arts. States and municipalities are slashing funding, arts education barely exists in school curriculums and the lack of discretionary income is affecting ticket sales.</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">As they say, necessity is the mother of invention. It shouldn’t come as a surprise to anyone that arts managers are engrossed in discussions about new models. Many organizations had reserves to weather a couple of bad years, but recently we’ve begun to ask – what if this is the “new normal?” And how arts managers describe the “new normal” reminds me of the Hindu tale of the </span><a href="http://www.wordfocus.com/word-act-blindmen.html"><span style="color: blue; font-family: Calibri;">Blind Men and the Elephant</span></a><span style="font-family: Calibri;">. As the story goes, six blind men were asked to touch and describe an elephant. Each man’s description varied widely depending on the part of the elephant the man touched, and as the tale says “each in his own opinion exceeding stiff and strong, each was partly right, and all were in the wrong.”</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">Our descriptions of the “new normal” are as different as our points of views, and thus our responses to our changing environments should be as unique as each of our institutions.&nbsp;<span style="mso-spacerun: yes;">&nbsp;</span>I fear anyone who offers a panacea to all proclaimed from his or her own mountain top, as the view from my mountain may be different. For example, in his mostly </span><a href="http://online.wsj.com/article/SB10000872396390444508504577593073546227962.html"><span style="color: blue; font-family: Calibri;">excellent article</span></a><span style="font-family: Calibri;"> about the Detroit Institute of Arts, Terry Teachout chides theater companies that “cling to the old-fashioned subscription model.” Similarly, in Nelson Pressley’s article “</span><a href="http://www.washingtonpost.com/entertainment/theater_dance/theaters-look-for-new-ways-to-draw-in-subscriptions/2012/08/08/b821bad0-dd98-11e1-8ad1-909913931f71_story.html"><span style="color: blue; font-family: Calibri;">Theaters Look for New Ways to Draw in Subscribers</span></a><span style="font-family: Calibri;">,” Tony Heaphy, Director of Marketing at Centerstage, describes subscribing as “a chestnut.” I have no doubt from their perspectives these comments are valid, but theaters that have experienced significant growth in their subscription base might view the situation differently. What works for one, rarely works for all. </span><br /><br /><span style="font-family: Calibri;">Therefore a customized approach tailored to your institution is wise. W</span><span style="font-family: Calibri;">hen looking at possible adjustments&nbsp;to your business model, I would suggest:</span></div><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">1)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">A test a day.</b>&nbsp;Test a new idea, small in scale, each day. Every day that an organization doesn’t test, is a day that it doesn’t learn. </span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">2)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span></b><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Test small, miss small. </b>Identify a challenge. Develop a hypothesis. Test a solution. But don’t bet the farm on it. Conduct each test fully expecting a negative result. </span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">3)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span></b><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Test ideas that are easily scalable. </b>In order to minimize risk, I’ve tested ideas that performed very well on a small scale only to realize that putting them into play in a larger way would be cost prohibitive.</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">4)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span></b><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Identify your <a href="http://en.wikipedia.org/wiki/Sacred_cow_(idiom)">sacred cows</a>, and test those first. </b>Often times we shy away from testing solutions to a known issue simply because that issue is a sacred cow. If you are looking for meaningful impact, identifying sacred cows is a good first step.</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">5)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span></b><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Be informed, but question everything – even “experts.” </b>Read everything you can. Follow experiments at other companies. Conduct research. Analyze data. But don’t accept anything or anyone as infallible. Even the best are human, and they speak only from their experience.</span></div><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">6)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span></b><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Be careful of “one size fits all” solutions. </b>I can’t tell you the number of times I’ve heard marketing directors wonder why something that worked so well in one city, bombed in the next. There are few universal truths in the marketing world. </span></div><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">7)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span></b><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Overcome your fear of change. </b>As humans, we are all programmed to fear change. You’ve identified a challenge. Formed a hypothesis. Tested a solution with impressive results. Developed a plan to scale the solution. And now it is decision time. Some people are paralyzed by fear of change. Be comforted by knowing that if you desire different results, you must act differently. Some difficult decisions are easy because they are demanded by circumstance. <b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div>http://arts-marketing.blogspot.com/2012/08/the-myth-of-ubiquitous-solution.htmlnoreply@blogger.com (Chad M. Bauman)1tag:blogger.com,1999:blog-33812369.post-3533853056609720348Sun, 22 Jul 2012 23:05:00 +00002012-07-22T19:27:26.294-05:00The Perfectionist and the Jack of All Trades<div class="separator" style="clear: both; text-align: left;"><a href="http://1.bp.blogspot.com/-QdWN-RQloPM/UAyHL3vwQ0I/AAAAAAAAAOA/PvPLiDs4MVY/s1600/Priority_Cartoon-resized-600.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-QdWN-RQloPM/UAyHL3vwQ0I/AAAAAAAAAOA/PvPLiDs4MVY/s1600/Priority_Cartoon-resized-600.png" /></a>I've been called a perfectionist, and until recently, I've always accepted that description as a compliment. However as a leader, one of my primary responsibilities is to help prioritize the work of the departments that report to me, and in doing so, it is very important to understand that most nonprofits are under resourced. In a world where there is never enough, either in terms of money or human time, where and how&nbsp;nonprofits commit&nbsp;their limited resources becomes very important. Perfectionists struggle in these environments because by nature, when we start something, it's hard to walk away with even the slightest flaw remaining.&nbsp;On the other hand, marketers routinely leave projects behind when a greater return on one's resources can be found in other places, bowing to the law of diminishing returns.&nbsp;To be both a marketer and a perfectionist has caused a few schizophrenic debates for me over the years, but I've come to learn to&nbsp;focus on core competencies, and to strive for excellence, rather than perfection, in those areas.</div><br />I've chosen to write about this today because I've recently&nbsp;worked with two very well respected marketers that I observed struggling with the same issue. The first was a technology specialist who was known for making even the most complicated systems work. He was part of a team that over time found their marketing costs rising while their returns fell (not a good place for anyone). I was brought in to&nbsp;conduct a marketing audit. In my first week with them, I observed this marketer spending 25 hours working on a fix for a technology enhancement that this organization was hoping to roll out to their members.&nbsp;After inquiring, I learned that he had been working on this fix for over a month, and had put in well over 100 hours on it. When I asked him if this particular technology enhancement was worth so much effort, he replied that it was to him because he had never failed to deliver before. From an outsider's perspective, it was easy for me to see that he was chasing perfection to the detriment of the organization. After looking at the demographics of&nbsp;their members, and the usage statistics from the previous technology enhancements the organization had launched, it was easy to project that less than one half of one percent of their membership base would likely use this new feature. So why focus so many resources on it? <br /><br />At almost&nbsp;the same time, I was advising an organization who had&nbsp;hired a strategic planning and market research firm to audit marketing and membership operations. The organization had selected one of the best firms in the business, but was experiencing cost overruns on projected labor expenses in the early stages of the project. The organization in question was large and complex, and one of the first things the firm did was request financial information in&nbsp;a variety of&nbsp;formats. Once delivered, a new junior member of the firm started analyzing the data sent, but in doing so, she couldn't get the financials to match perfectly between the&nbsp;various formats. She continued to work on the financials in an effort to get them to match to the penny,&nbsp;and in doing so, soared past the projected work hours set aside for the initial phase of the project. When I discovered the issue, I asked her how far off the&nbsp;financials were, and the gap was less than $1,000 on a $40 million operating budget. Even if she had found a way to reconcile the remaining funds, the conclusions from her analysis wouldn't have changed in the slightest. Her fear was that if this data was shown to the board of the directors, she would be held at fault because they didn't balance perfectly.<br /><br />Perfectionists sometimes lose their way in an attempt to achieve something that might not be achievable, or if achievable, probably isn't worth the cost of the achievement. Perfectionists struggle with concentrating too much on one task, while others (I'll call them Jack of&nbsp;All Trades)&nbsp;struggle with just the opposite - not being able to decide where to focus their attention. During times of strife, marketers can find themselves getting friendly advice from a wide-range of well meaning others - board members, executive directors, senior staff members, artists and even spouses. People love to brainstorm, and send all their ideas to the marketing department. This isn't to say that ideas should be ignored.&nbsp;Great ideas can come from anyone, but the same can be said of poor ideas. <br /><br />A couple of years ago, I spent some time with a new managing director of a mid-size regional theater. It was his first time leading a company, and he wanted to get it right. The company was known to have serious challenges, and when he started, everyone started sending him helpful hints on how to solve the issues. When I visited, he confided he didn't know where to start, and most important to him was pleasing the board that just recently hired him. So he vigorously pursued each idea that was sent to him from board members, and hadn't achieved much except exhausting himself. Over lunch one day, I asked him what the&nbsp;theater's most&nbsp;important challenge was; the one that if left unaddressed, would result in catastrophy.&nbsp;His answer was quick and clear - the theater's&nbsp;debt. I asked him what would happen if he focused all his energies on eliminating the&nbsp;theater's debt. He was afraid the general operations of the company would falter. He feared that the board would be upset because he wouldn't have time to focus on each issue they brought to his attention. And he was afraid of failure, so he tried to be a jack of all trades in an attempt to be everything to everyone. In the end, he decided to concentrate on dealing with the debt issue, and six months later, had identified a foundation that was willing not only to eliminate&nbsp;the theater's&nbsp;debt, but also&nbsp;wanted to establish a working capital fund for future operations. <br /><br />Deciding what to focus on and more importantly what not to focus on takes courage of conviction. Perfectionists get lost in single projects, and Jacks of All Trades try to address everything at the same time. I've been both in my career, and over time, have become better at prioritizing. Below is a basic matrix that may help:<br /><br />In priority, concentrate on solutions that provide the following:<br /><strong>High Impact on Critical Issues/High Revenue Line Items - </strong>these should be few in number but receive the most amount of your attention.<br /><strong>Low Impact on Critical Issues/High Revenue Line Items </strong>- even a small improvement on a critical issue can result in an excellent return on investment.<br /><strong>High Impact on Minor Issues/Low Revenue Line Items </strong>- only spend time&nbsp;on these projects&nbsp;if all critical issues and high revenue areas are performing well.<br /><br />If you are in a nonprofit, and have the time to concentrate on solutions that will provide a low impact on a minor issue/low revenue line item, then perhaps you are overstaffed (or have reached the holy grail of&nbsp;the nonprofit sector).http://arts-marketing.blogspot.com/2012/07/the-perfectionist-and-jack-of-all-trades.htmlnoreply@blogger.com (Chad M. Bauman)0tag:blogger.com,1999:blog-33812369.post-1886853457419267822Sat, 30 Jun 2012 13:55:00 +00002012-07-22T19:30:44.248-05:00The Assembly Line and Failure<div class="separator" style="clear: both; text-align: left;"><a href="http://4.bp.blogspot.com/-OzzqhXncRSc/T-8GU55vkKI/AAAAAAAAANw/33ofmV6W2kY/s1600/RiskNotTakingRisksCartoon.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a></div><a href="http://4.bp.blogspot.com/-OzzqhXncRSc/T-8GU55vkKI/AAAAAAAAANw/33ofmV6W2kY/s1600/RiskNotTakingRisksCartoon.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="285" src="http://4.bp.blogspot.com/-OzzqhXncRSc/T-8GU55vkKI/AAAAAAAAANw/33ofmV6W2kY/s320/RiskNotTakingRisksCartoon.jpg" width="320" /></a>I've recently returned from Theatre Communications Group's <a href="http://www.tcg.org/events/conference/">Annual Conference</a>, where the&nbsp;theme was "model the movement," focusing on new models and transformative ideas from the field. I was particularly excited to attend this year, as the speakers included <a href="http://www.woollymammoth.net/">Woolly Mammoth Theatre Company</a>'s Artistic Director <a href="http://woollymammoth.net/about/history.php">Howard Shalwitz</a> and author/marketer extraordinaire <a href="http://www.sethgodin.com/sg/">Seth Godin</a>.<br /><br />Howard kicked off the conference&nbsp;with his speech "Theatrical Innovation: Who's Job Is It?,"&nbsp;in which&nbsp;he compared the systems of our regional theaters to that of an assembly line, a theme that would resurface multiple times over the course of the conference. As regional theaters grew and became more complex, often times non-profit managers were encouraged to borrow best practices from corporate entities, designed to improve efficiency, streamline processes and increase return on investment. And it worked...until it didn't. You see, the process of creating art cannot be controlled by an assembly line system. We don't create widgets. And as one artist said to me, "if I was exclusively concerned with return on investment from a monetary perspective, I wouldn't create art, and I certainly wouldn't have had children."<br /><br />This isn't to say that&nbsp;theaters&nbsp;shouldn't have systems. Systems have helped us reduce waste, maximize time and better utilize our resources. But an over reliance on particularly inflexible systems can also guarantee failure, at least from an artistic perspective. Theater is a particularly risky business, even when producing so called "cash cows," as I have previously written about <a href="http://dctheatrescene.com/2012/04/17/what-is-safe-in-the-theater/">here</a>. To quote one artistic director, "theaters eat risk for breakfast." But as the economy has contracted, have we become too reliant on our systems? and if Woolly Mammoth is wrestling with this issue, a company that is known to be nimble and innovative,&nbsp;then it must be a significant challenge for others. How often do we as marketing directors get handed a project that we can't wait to work on, knowing that we will need to call upon all of our creativity to develop innovative audience development strategies, only to think - shit, if I give the time and attention this project requires, the next three shows will suffer? Which then results in trying to pound a square peg into the round hole that is our assembly line, which is a disservice to both the artist and the marketer. Great work will push boundaries across all departments within an organization, and senior managers need to create systems and budgets that not only allow space for custom approaches, but that encourage them.<br /><br />As managers, we like to mitigate risk, thinking that if we could just control our variables just a little more, that we would reach a utopia of risk free theater producing. It's a fool's errand. Since the beginning of the global economic crisis in 2008, the stakes have risen so high that it can feel like we don't have room to fail. <a href="http://arts-marketing.blogspot.com/2010/07/are-you-expert-you-must-be-failure.html">But in failure, we find success</a>. It sounds counter intuitive, but making today as failure free as possible will ensure a less successful tomorrow. Even Mr. Godin, a titan in the business world, in his bio proudly proclaims "as an entrepreneur, he has founded dozens of companies, most of which failed." So the question we should all be asking, particularly in the budget process, is - are we building enough room for experimentation and failure? <br /><br />Recently, I had the opportunity as a consultant to work with a few senior managers who were tasked with&nbsp;reinventing a business model for a program that was part of a much larger institution. Due to funding cuts, the program needed to become revenue neutral over time, and pro formas were developed to guide that process. Along the way, the program hit some unforeseen challenges, but as the pro formas were the only measurement of success, decisions were made that allowed the organization to "stay on target" by hitting financial benchmarks as scheduled&nbsp;at the&nbsp;expense of future operations. When I began my work, I was asked if I thought the program could reach revenue neutral status on the timeline&nbsp;outlined in the pro formas. I said that I believed it was possible, but then&nbsp;followed up by saying the question asked really should be whether the program can remain a going concern after hitting revenue neutral status given the short-sighted decisions that would be necessary to get there. In other words, does it really matter&nbsp;if we&nbsp;got the patient to the hospital in record time if the patient dies in route? How many decisions do we make each year that only considers the financial position of the company during the fiscal year in question? and would we make different decisions if we considered the pros and cons over multiple years? The financial strain on many arts organizations is tremendous, but if we continue to sprint to obtain single year targets while we ignore the conditions that wait for us at the finish line, over time we can snatch defeat from the jaws of victory. Unless an organization is under dire financial constraints, and death is literally knocking at the door, all major decisions must be viewed in a multi-year context.<br /><br />Studies have shown that people are motivated more by <a href="http://heatherlench.com/wp-content/uploads/2008/07/larrick.pdf">avoiding failure than by achieving success.</a> As this article states, some professional <a href="http://www.podiumsportsjournal.com/2010/05/04/is-your-focus-on-achieving-success-or-avoiding-failure/">athletes like winning, but they really hate to lose</a>. This would explain why limiting risk is so appealing, even if it jeopardizes our ability to succeed. But I would argue that mindset breeds mediocrity, and&nbsp;that artists and arts administrators are different. We know that our best work comes from taking risks, and this is something we need to&nbsp;remember as we head back into work tomorrow.http://arts-marketing.blogspot.com/2012/06/assembly-line-and-failure.htmlnoreply@blogger.com (Chad M. Bauman)1tag:blogger.com,1999:blog-33812369.post-8591649196148256905Sat, 02 Jun 2012 18:06:00 +00002012-06-02T13:50:46.304-05:00The First Key to Success -- Defining It<a href="http://1.bp.blogspot.com/-J2jSTwZeuhY/T8pZllC7f-I/AAAAAAAAANg/Ia-y3eis10A/s1600/neil-armstrong.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-J2jSTwZeuhY/T8pZllC7f-I/AAAAAAAAANg/Ia-y3eis10A/s1600/neil-armstrong.jpg" /></a>Without clear direction, success can never be achieved. We’ve all experienced situations where we run toward a goal as fast and furious as we can only to have the goal posts moved on us in route. When this happens over and over again, an organization is guilty of foolishly wasting precious resources at a moment when most are under resourced as it is.<br /><div class="MsoNormal"><br /></div><div class="MsoNormal">Success begins with leadership. As Michael Kaiser discussed in his <i>Huffington Post</i> blog, <a href="http://www.huffingtonpost.com/michael-kaiser/there-must-be-a-leader_b_969399.html">there must be a leader</a>. All too often, arts managers try to lead by consensus. They don’t want to be the bad guy. They don’t want people to be upset with them. In complex situations, many times the answer isn’t clear, and trying to get a wide variety of stakeholders moving in the same direction can be tough. But this isn’t a time to postpone critical decisions in an effort to get senior staff, board members and other various stakeholders to agree on a course of action. The executive has been hired to lead, and lead they must. Part of leadership is gathering all the data necessary from various perspectives, and then making a timely decision. Waiting for full consensus is folly because more often than not, time does not bring consensus. </div><div class="MsoNormal"><br /></div><div class="MsoNormal">When a problem reaches the desk of an executive director, usually it means that an easy solution isn’t available, because if there was a simple answer, senior managers would have resolved the situation. The life of an executive director involves making imperfect decisions daily. It isn’t a job for the lighthearted. Failure is often public and wide reaching. But make no mistake about it – inaction or a delay in decision making is a decision in itself. Taking no action in an attempt to build consensus around an issue that will never result in a consensus decision is even more costly than setting a clear course toward a defined goal. &nbsp;As an outside adviser, I was once asked to participate in a meeting where senior managers from an organization were divided on a particularly divisive issue. Each argued their position passionately and articulately. At the conclusion of hours of conversation, the room looked to the executive director for a decision, at which time he asked for a vote of hands. I about fell out of my chair. Unfortunately for them, there were an even number of people in the room, and it was hopelessly deadlocked with a leader who would not make a decision because he desperately wanted consensus. </div><div class="MsoNormal"><br /></div><div class="MsoNormal">Someone has to lead, and one of the most important decisions a leader makes is defining success for the organization. Senior managers can and should be relied upon to develop strategies for success, but the leader must define the destination before a map can be created. </div><div class="MsoNormal"><br /></div><div class="MsoNormal">When defining success for arts organizations, here are just a few things to consider:</div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Growth vs. Sustainability.</b> In a previous post, I asked if “<a href="http://arts-marketing.blogspot.com/2012/04/can-right-sizing-be-as-sexy-as.html">right-sizing could be as sexy as expansion</a>?” We live in the country of manifest destiny, super-sized meals and McMansions. Bigger is always better. But this mentality has led to obesity being an <a href="http://www.cdc.gov/obesity/data/adult.html">out of control epidemic</a>, people purchasing homes they could not afford, and boom or bust economic trends. I see the same success metrics in play at non-profit arts organizations. Chief marketing and development officers are measured solely by growth, and if an organization tries to right size, top talent will leave because their numbers will shrink, not because of sub-par work, but merely because of a decrease in tickets to sell or programs to fundraise for. Why do we constantly equate success with growth, when it is entirely possible to demonstrate significant growth to the detriment of sustainability? If it costs you $2 for every additional $1 in growth, and that equation doesn’t equalize over time, then you will demonstrate growth until such time as your lines of credit are maxed out, your board becomes unwilling to conduct emergency fundraising campaigns, and the community becomes tired of your pleas for help. This is how once stable and reputable organizations get into trouble. Success should be defined, at least in terms of business models, by sustainability, not growth, which is not to say they are necessarily mutually exclusive, but all too often, we succumb to pride and make growth the more highly prized success metric.</div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Quantity vs. Quality. </b>Similar to growth, I’ve found that some arts organizations in part define themselves by the quantity of work they produce. I’ve never understood this. Most artists are motivated by creating the highest caliber of work, but then arts organizations feel pressured to produce a certain arbitrary amount of plays, concerts or performances each year, with an increase in offerings usually regarded as a sign of success by board members, funders and the press. The highest quality products in the world are not produced in mass as mass production doesn’t usually dovetail with world class quality. Case in point, if asked, I’m sure Steve Jobs would have been happy to have the best computers on the market, even if his market share was significantly less than competing products. And today, TedX is experiencing brand erosion because of quick expansion resulting in it losing in part its competitive advantages. Long ago, I used to work for a company that only produced one or two plays a season because the average gestation time on a project was several years. Although some objected to the avant-garde nature of the work, the company was almost universally lauded for artistic excellence. However, if quantity of productions were the litmus test for success, it wouldn’t be considered a successful theater.</div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b style="mso-bidi-font-weight: normal;">Impact vs. Financials. </b>Alan Brown, Clay Lord and Theatre Bay Area have spent the last two years working on <a href="http://intrinsicimpact.org/">measuring the intrinsic impact of live theater</a>. I won’t go into the specifics now as this study deserves its own blog post, but I must say that I am excited that the study is changing how people, especially funders, are defining success. This study has developed a new system to quantifiably measure the intrinsic impacts theaters are having on audiences, and funders are starting to understand that previous metrics, such as audience members served, might not deliver the full picture. Along with financial and attendance data, what if theaters started to define their success by the impact they are having on their communities, which for the first time can be benchmarked, measured and tracked year over year. </div><div class="MsoNormal"><br /></div><div class="MsoNormal">The first step on any journey is to clearly define the destination and to establish success metrics. <br /><br /><b>Leaders</b>—set the course and the direction. Don’t fear lack of consensus. Be bold. Be ambitious. And be decisive. </div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b>Senior managers</b>—establish clear success metrics, and track them relentlessly over time.</div><div class="MsoNormal"><br /></div><div class="MsoNormal"><i>“<span lang="EN">I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.” – President John F. Kennedy, in an address to a joint session of Congress on May 25, 1961.</span></i></div>http://arts-marketing.blogspot.com/2012/06/first-key-to-success-defining-it.htmlnoreply@blogger.com (Chad M. Bauman)1tag:blogger.com,1999:blog-33812369.post-5596691428199968849Sun, 20 May 2012 01:14:00 +00002012-05-19T20:19:40.984-05:00Lost in the Crowd<div class="separator" style="clear: both; text-align: left;"><a href="http://2.bp.blogspot.com/-20uabiNbOMM/T7hFDZcz13I/AAAAAAAAANA/sgXmx9GDQAU/s1600/Crowd_.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="212" src="http://2.bp.blogspot.com/-20uabiNbOMM/T7hFDZcz13I/AAAAAAAAANA/sgXmx9GDQAU/s320/Crowd_.jpg" width="320" /></a>Direct marketing practitioners know that success is&nbsp;primarily a&nbsp;numbers game. That's not to discount the work that goes into tweaking a control package, testing messages, building list models and analyzing data. However, the&nbsp;foundation of&nbsp;any direct marketing campaign, be it for ticket sales, subscriptions, memberships or donations, is the number of qualified leads in your database.</div><br />A few months ago, I wrote a post about how many of us <a href="http://arts-marketing.blogspot.com/2011/12/who-are-your-best-customers-and-why.html">didn't know who are best customers</a>&nbsp;were. Since that time, I have come to realize that many of us don't know who many of our regular customers are. <br /><br />Performing arts organizations have a distinct advantage over a majority of&nbsp;museums as&nbsp;gathering leads&nbsp;usually&nbsp;stems&nbsp;from capturing information during the ticket buying process, although challenges do exist.&nbsp;Organizations that have a robust group sales business know that it's all about personal relationships as one group contact can bring in hundreds of patrons, and although that's good for revenue, it is a challenge for lead development. For the most part, performing arts organizations have no clue as to who attends as part of a group as they don't gather information for each attendee. And in some cases, private group sales agents don't want to release information as it would require handing over lucrative contacts. And aside from groups, performing arts organizations are becoming more reliant on third party vendors to move unsold inventory, but in doing so, in most cases, they sacrifice the ability to collect contact information. And how many of us track individual people attached to multi-subscription packages? If the leader of the subscription group decides not to renew, we don't have the ability to contact the others. <br /><br />We estimated a couple of years ago at Arena Stage that at any given time, on average we only had the contact information for roughly 60% of the people in the house. I always wondered what the value of the other 40% was.<br /><br />Over time, we put into place various mechanisms to assist in collecting more leads.&nbsp;Group leaders were&nbsp;given financial&nbsp;incentives to provide contact information for each individual in their group. We reached out to subscription purchasers and asked them to identify the other people on their account. And we instituted a policy that required complete contact information for all comp tickets, and started ticketing almost every free event.<br /><br />Now that I've been in the museum world for&nbsp;all of&nbsp;two months now, I've noticed that their challenges are much more significant than those that face&nbsp;performing arts organizations. Some museums have millions of visitors each year, and they only capture contact information for a very small percentage of their visitors. Highly popular free admission museums don't want to institute time consuming procedures to capture information for&nbsp;fear that it&nbsp;would impede timely access to the museum (can you imagine the lines that would form?). On the other hand, most free museums have membership and fundraising circles that rely upon qualified leads. How&nbsp;do you&nbsp;fundraise in a cost effective manner&nbsp;if you don't know who your visitors are? It seems that I am by far not the first to stumble upon the holy grail of marketing challenges that museums face, but given my newness to the field, I was surprised how daunting capturing&nbsp;information could be.<br /><br />Here are some possible ideas to collect information from those lost in the crowd:<br /><br />1) <strong>Collect information at multiple contact points.</strong> Prior to getting to a museum, most people visit a website. Take public transportation. Park their vehicle. Why not identify new visitors to your website and feed them a small roadblock ad asking them to sign-up for information from your museum, including future discount offers and exclusive content. Could you station "visitor concierges" outside subway stations who offer tips on exhibits and museums, and collect information during the process? Could you partner with your parking lot to develop a way to capture visitor data? <br /><br />2) <strong>Offer exclusive content. </strong>Exhibits are becoming more and more interactive every day. With more than <a href="http://www.bgr.com/2012/03/08/comscore-more-than-100-million-smartphone-users-now-in-u-s/">100 million smart phone users</a> in the United States, could exhibits feature exclusive interactive content using QR codes that also captures data in the process? As museums build out content online, what if you placed some exclusive content behind a free "pay wall" that requires registration to access? or what if an exhibit offered to send you a free memento of your experience via email?<br /><br />3) <strong>Ticket events.</strong> Many museums offer a large variety of free and popular educational programming and docent lead tours. Even though they are free, why not&nbsp;require a ticket or an RSVP? Visitors can register well in advance, or they can do so quickly on site at ticket kiosks.<br /><br />I am sure these suggestions only offer a way to make a small dent in the overall problem, but the challenge is clear -- finding easy, affordable and efficient ways for visitors to self identify themselves as wanting more information from&nbsp;musuems is of utmost importance to our direct marketing strategies.http://arts-marketing.blogspot.com/2012/05/lost-in-crowd.htmlnoreply@blogger.com (Chad M. Bauman)1tag:blogger.com,1999:blog-33812369.post-182526224530292118Sun, 06 May 2012 19:06:00 +00002012-05-06T14:33:58.949-05:00Planning a Turnaround<a href="http://www.bizplanhacks.com/wp-content/uploads/2116823972.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="239" src="http://www.bizplanhacks.com/wp-content/uploads/2116823972.jpg" width="320" /></a>Deficit budgets have started to accumulate. Core audiences have&nbsp;began to slip away as smaller and smaller houses become the norm. And there is a palpable sense that a once formidable company has lost its way as a growing group of stakeholders from donors to press start asking what&nbsp;happened?<br /><br />Almost certainly, the marketing&nbsp;department is&nbsp;pointing&nbsp;its finger at the artistic staff laying the blame&nbsp;for the downturn solely at their doorstep,&nbsp;while the artistic staff believes that&nbsp;if they only had better marketing, the issue would&nbsp;disappear. Reality is that if a company is experiencing a significant decline, usually there are issues&nbsp;in both areas that need to be resolved.<br /><br />At some point, the financial position of the company becomes untenable, and a turnaround team is brought in, usually in the form of a new artistic director, but sometimes a new executive director and marketing director as well. If executed well,&nbsp;strategic shifts in programming along with a well thought out rebranding and promotional&nbsp;campaign can lead to exceptional results. But a turnaround is only as good as its&nbsp;implementation.<br /><br />Some things to consider when planning a turnaround...<b>&nbsp;</b><br /><br /><b>Identify Toxic Assets. </b>The new guy hired to design and implement the turnaround knows one thing--what the company has been doing isn't working, and that the board desperately wants a change and they want it quickly. It can become overwhelmingly tempting to cut old programs immediately, and start&nbsp;from a&nbsp;completely fresh slate. However often times even&nbsp;the most&nbsp;struggling company has positives in which to start building from. Cutting everything quickly in an effort to rebuild from a new baseline can eliminate valuable assets. In for-profit turnarounds, the idea is to separate toxic assets from the others in an effort to give a new leader at least some base to work from. Throwing the baby out with the bathwater may be quick and it might provide an immediate signal that there is a new sheriff in town, but it usually isn't the most efficacious strategy. Instead of a hatchet, bring out the scalpel. Make precision cuts in an effort to save what can be used to help regenerate a new future.<b> </b><br /><br /><b>Develop a Bridge for Audiences. </b>When considering radical programming changes, make sure to design and implement a bridge for your current audiences. In a turnaround, the new is always given priority over the well established, but loyalty is something that takes years to cultivate, and I'd rather reinvent from a partial base than none at all. This is not to say that one should shy away from making needed programming changes, it is only to say that as much thought needs to go into how to introduce them into the market as went into designing the programs themselves. I've seen companies attempt to reinvent themselves overnight with little thought to patron migration, and as a result, they lost a majority of the base they had cultivated over prior decades.&nbsp;Major donors can&nbsp;provide venture capital to introduce new programming if engaged well, and&nbsp;audiences can be&nbsp;successfully transitioned&nbsp;into new programming if done so in a gradual and considerate manner. I know because I've done it on multiple occasions.<b> </b><br /><br /><b>Market Research Doesn't Have to Influence Programming to be Helpful. </b>When asked about market research, Steve Jobs famously told <i>Business Week</i> that he doesn't conduct market research because "a lot of times, people don’t know what they want until you show it to them.”&nbsp; Similarly, Julie Taymor in an interview with <a href="http://www.nytimes.com/2011/06/20/theater/julie-taymor-discusses-spider-man-and-twitter-critics.html?pagewanted=all"><i>The </i><i>New York Times</i></a>&nbsp;said she didn't believe in focus groups&nbsp;stating that "if focus groups had been used on <i>The Lion King</i> there would be no death of Mufasa because groups would have reacted negatively." Given that <i>The Lion King</i> is&nbsp;<a href="http://www.hollywoodreporter.com/news/lion-king-broadway-top-earner-disney-309685">Broadway's top earner of all time</a>, and&nbsp;at the time of Mr. Jobs' death Apple was the <a href="http://bits.blogs.nytimes.com/2011/08/09/apple-most-valuable-company/">most valuable company in the world</a>, there is&nbsp;wisdom in these remarks. However, I bet the marketing people working with&nbsp;Ms. Taymor and Mr. Jobs would have loved&nbsp;market research, not because they wanted it to influence product development, but it would have informed them on how to message the introduction of the product into the market. Even though in many cases "the&nbsp;new" is absolutely necessary&nbsp;and people may&nbsp;desire it without knowing, marketers have to break through&nbsp;an initial&nbsp;resistance barrier.<b>&nbsp;</b><br /><br /><b>Artistic Planning is Where it all Starts. </b>I attempted to rebrand a company once without a clearly articulated artistic strategy. We were told that exciting new programs were going to be introduced to replace well worn ones, but when pressed, there were very few details. Feeling that we couldn't wait any longer, I started the first phase of the rebranding process thinking that the details&nbsp;could come later. Boy was I wrong. Two months later, everything came to a screeching halt when we were trying to develop a communications matrix around&nbsp;an amorphous programming change. We couldn't message what didn't exist. Luckily for everyone, the artistic team came to the same realization, and within a short amount of time, a brilliant new artistic strategy was developed, and we were back on the fast track. I learned an important lesson that day--for a complete&nbsp;turnaround to be successful, it all starts with a detailed new artistic strategy. <br /><br /><b>Cultivating New Audiences is an Expensive Proposition (at first). </b>Marketers know that retention is cheap, and acquisition is expensive. We also know that both are absolutely critical. When introducing new programming, it is important to know that acquiring audiences for newly developed programs will require a dedicated effort over an extended amount of time as well as considerable resources. The "build it and they will come" assumption is flawed. Audience development is a process, and in the short term, often times it will result in a&nbsp;negative impact to the bottom line. New programming and audience development are&nbsp;investments in the future of the organization. That said, depending on the severity of an organization's finances, the necessary resources for&nbsp;such an&nbsp;investment may not be readily available, which&nbsp;can lead&nbsp;to the premature cancellation of new programs. If that occurs, it is a waste of time and resources.<br /><br />In his book <i><a href="http://www.amazon.com/The-Art-Turnaround-Maintaining-Organizations/dp/1584657359">The Art of the Turnaround</a></i>, Michael Kaiser discusses his classic mantra "good art, marketed well" as a centerpiece for a successful&nbsp;turnaround. I agree with Mr. Kaiser that often times turnarounds require adjustments to programming or marketing, and in&nbsp;some cases, both. But over time, it has become an alarming trend to see an increase in&nbsp;the number of failing organizations&nbsp;that do both&nbsp;relatively well. I've started to wonder, as many others have, if mature organizations are failing because their business models haven't fundamentally adjusted to the rapidly changing external environment in the past fifty years. &nbsp;In moments like these, I'm reminded of a quote from Buckminster Fuller, who said "you never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” I'm fearful that training institutions&nbsp;are teaching&nbsp;models that are dying a slow death, and that major institutions continue to look to senior managers entrenched in failing systems for the cure. I believe that co-management hybrids pairing the wisdom and experience of more&nbsp;senior leaders with the inventiveness and curiosity of Gen X'ers and Millenials could be the best bet. But one thing is for sure--rearranging the chairs on the deck of the Titanic won't save the ship. For that, you have to find the fundamental cause of the problem. It could be programming. It could be marketing. It could be both. Or, it just might be that we are clinging on to a business model that is rapidly failing us.http://arts-marketing.blogspot.com/2012/05/planning-turnaround.htmlnoreply@blogger.com (Chad M. Bauman)0tag:blogger.com,1999:blog-33812369.post-4998876259211463884Sat, 21 Apr 2012 23:37:00 +00002012-04-21T18:49:14.938-05:00Can right-sizing be as sexy as expansion?<span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">On Thursday of last week, <a href="http://www.thomascott.com/"><span style="color: blue;">Thomas Cott</span></a>featured several articles on "right-sizing" in the arts in his daily "<a href="http://www.thomascott.com/"><span style="color: blue;">You've Cott Mail</span></a>." As many of his emails tend to do, it has stuck with me for days. See his email came at an opportune time for me. I had just given the plenary speech at <a href="http://www.american.edu/cas/performing-arts/eals/index.cfm"><span style="color: blue;">American University's Emerging Arts Leaders Symposium</span></a>which partially focused on NEA Chairman Rocco Landesman's "<a href="http://newplay.arenastage.org/2011/01/fighting-words-from-rocco-landesman.html"><span style="color: blue;">supply and demand" speech</span></a>, and soon thereafter, Rebecca Novick authored a blog entitled "<a href="http://www.giarts.org/article/please-dont-start-theater-company"><span style="color: blue;">Please, Don't Start a Theater Company."</span></a><o:p></o:p></span><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">A central theme from these various sources began to emerge, which was packaged quite nicely by Rebecca when she said: "In the past fifteen years, the number of nonprofit theater companies in the United States has doubled while audiences and funding have shrunk. Neither the field nor the next generation of artists is served by this unexamined multiplication of companies based on the same old model. The NEA's statistics on nonprofit growth, set against its sobering reports on declining arts participation, illuminate a crucial nexus for the field, a location of both profound failure and potential transformation." <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">If data indicates that the field continues to expand at an unsustainable rate propagating the continuance of a model that is considered by some to be out of touch with current realities, then why do we continue in such a manner? My thoughts below... <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">It's as American as apple pie</span></b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">. Let's face it, expansion is sexy. We are the children of manifest destiny. Starting from nothing and growing an empire. Conquering new frontiers. These are all American ideals. Hell, many of our childhood boardgames indoctrinate this philosophy. Is it any surprise that as adults we equate expansion with success? And this perception of success is handsomely rewarded. Grow your audience and your revenue, and you will increase your likelihood of additional contributed revenue. But if those metrics decline, you'll need to do some explaining. <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Follow the money</span></b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">. In the 1990s, educational programming became a funding priority, so every theater across the nation rushed to create an education department. To some,&nbsp;it didn't matter if the programming was sub par, they just knew they needed a department to be competitive. In the 2000s, capital projects became a priority, and more than a decade later, we have new buildings all across the country. Some were desperately needed as aging infrastructure was failing, while others were less of a necessity but were built on hopes of significant future returns. After opening, some organizations thrived in their new facilities, while many others struggled almost from day one. In his article "<a href="http://kauffman.kansascity.com/articles/new-facilities-arent-always-an-unqualified-success/"><span style="color: blue;">New Facilities Aren't Always a Qualified Success"</span></a>in the<i> Kansas City Star</i>, Scott Cantrell discusses the challenges of several major new performing arts centers, including Dallas's <a href="http://www.attpac.org/"><span style="color: blue;">AT&amp;T Performing Arts Center</span></a>, Philadelphia's <a href="http://www.kimmelcenter.org/"><span style="color: blue;">Kimmel Center</span></a> and Miami's <a href="http://www.arshtcenter.org/"><span style="color: blue;">Adrienne Arsht Center</span></a>. All of which opened without finishing their fundraising campaigns and operated with multi-million deficits. Two years into the new decade, it seems that funders have started to realize the magnitude of the problem, and are now beginning to focus on sustainability as a priority, providing working capital to companies to right-size, rather than providing incentives to expand. <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Build it, and they will come. </span></b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Prior to launching a capital campaign, most organizations commission at least one feasibility study to determine whether or not the company has the capacity to raise the necessary funds to pay for capital improvements. But how many thoroughly study whether or not there is enough support in their communities to sustain an expansion for decades to come? When Arena Stage opened the <a href="http://www.arenastage.org/plan-your-visit/the-mead-center/"><span style="color: blue;">Mead Center for American Theater</span></a>, I was thankful that the new building only increased overall capacity by 6% in comparison to the previous structure. Although renovations and improvements were desperately needed, I wasn't convinced that we could introduce a large amount of additional inventory into a city which was already trying to support five previously built new theater complexes. If desired and demand warranted, Arena Stage was able to increase inventory by expanding beyond its typical 9 month season, but they weren't forced into an expansion due to a large increase in the capacity of the new complex. The challenge for Washington at this moment is clear--we have dramatically increased supply over the past decade, and with our capital projects now complete, we must develop and support new audience development campaigns with as much gusto as our capital campaigns. We have to build our audiences, which up until now, we haven't successfully done in the last decade. This is the real challenge. Ten years from now, will our new theaters be empty? <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Can you display it? </span></b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">I find it fascinating that many museums have an aggressive acquisition plan but only display a very small percentage of their current collection. There seems to be a commonly accepted premise that major museums only display 10% of their collection because they are limited in terms of space and resources. I can understand acquiring new objects that aren't in display condition for research purposes, but why expand a collection of display quality objects if you don't have the opportunities to display what you currently have? Again, I'm a novice in museum studies, but it would seem to me that before expanding, a museum might consider shifting its resources to developing traveling exhibits so its current collection can be seen. What's the point of acquiring items with very little likelihood of every displaying them to the public? <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">What's going on in Ohio? </span></b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">I've been closely following two non-profit arts organizations based in Ohio over the past few years, as I believe they can be an example to us all. The first, the <a href="http://www.columbussymphony.com/"><span style="color: blue;">Columbus Symphony</span></a>, was featured in Thomas Cott's aforementioned email. After struggling for years, they conducted a study that indicated that the city of Columbus could only support a symphony with an $8 million operating budget instead of the $12.5 million budget they currently had. From this, they decided to "right-size" their organization to match the current demand in their market by <a href="http://www.nxtbook.com/nxtbooks/symphonyonline/Spring_2012/#/38"><span style="color: blue;">joining forces with the Columbus Association for the Performing Arts</span></a>. Meanwhile across the state, the 90 plus year old <a href="http://www.clevelandplayhouse.com/"><span style="color: blue;">Cleveland Playhouse</span></a> laid off several senior staff members, dropped two productions from its season and <a href="http://www.cleveland.com/entertainment/plaindealer/tony_brown/index.ssf?/base/entertainment-0/1232011878322260.xml&amp;coll=2"><span style="color: blue;">trimmed its budget by 18% in 2009</span></a>, prior to moving to the newly renovated 515 seat Allen Theatre in 2011. Previously, the Allen Theatre boasted 2,500 seats, but when the Cleveland San Jose Ballet left town, the Cleveland Opera downsized and Broadway tours dried up, the Allen Theatre was only in use 90 days out of the year because it was too big for most productions. The solution--the Cleveland Playhouse, Cleveland State University and PlayhouseSquare <a href="http://www.cleveland.com/arts/index.ssf/2011/09/the_renaissance_of_clevelands.html%20"><span style="color: blue;">partnered resulting in a newly renovated Allen Theatre</span></a>with 1,985 fewer seats! And it seems that it has worked out quite well for all involved. Revenue for the <a href="http://www.cleveland.com/arts/index.ssf/2012/01/relocation_to_playhousesquare.html"><span style="color: blue;">Cleveland Playhouse more than doubled</span></a> and an underused space became the new talk of the town. <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">This isn't to say that expansion is always bad,&nbsp; sometimes it is absolutely necessary. However, it isn't always beneficial, even during moments of great success.&nbsp;If your theaters are playing to capacity, perhaps you have discovered the sweet spot for your organization. Push just a little further, and too much of a good thing could tip the scales in an unfavorable direction, leaving you wondering how you managed to snatch defeat from the jaws of victory. Expansion can be attractive, but stability is pretty damn sexy too.<o:p></o:p></span></div>http://arts-marketing.blogspot.com/2012/04/can-right-sizing-be-as-sexy-as.htmlnoreply@blogger.com (Chad M. Bauman)0tag:blogger.com,1999:blog-33812369.post-2730321100359725833Sun, 08 Apr 2012 21:39:00 +00002012-04-08T18:25:45.347-05:00Purposeful Acquisition<div>Several years ago, I wrote a post entitled "<a href="http://arts-marketing.blogspot.com/2009/08/want-to-get-into-trouble-concentrate-on.html">You want to get into trouble? Concentrate on new audiences.</a>" At the time, I was confused and frustrated with the relentless focus on developing new audiences. The field's obsession with the new to the detriment of the loyal seemed illogical. My good friend <a href="http://www.linkedin.com/pub/laura-willumsen/4/48/737">Laura Willumsen</a>, senior consultant at <a href="http://trgarts.com/">TRGArts</a>, summed it up quite nicely by saying "we should find a way to love the one we're with, before we start courting others." Pretty safe advice that came at the perfect time for me.<br /><br />Three years later, I have come to realize that healthy arts organizations have equally robust campaigns focused on new acquisition and retention, and increasingly we are focusing on improving the overall lifetime value of our customers.<br /><br />For those with retention problems, I would still advise spending a majority of your resources reducing attrition before launching costly acquisition campaigns. There is nothing worse than spending a significant amount of resources enticing new patrons in the front door while your current customer base runs out the back door. And from a financial perspective, that is one of the easiest ways to sink the ship.<br /><br />That said, if attrition and renewal rates are within the range of industry standards, more than likely it is time to concentrate on acquisition. Here are a couple of thoughts...<br /><br /><span style="font-weight: bold;">Programming</span>. If you are looking to acquire new audiences, either you can dig a little deeper in your current well, or you can dig a new well altogether. If untapped audiences remain within your core programming, then continuing to dig deeper in your current well probably makes the most sense. If however, you find that your current programming has tapped out its audience base, digging a new well with expanded programming might be the key to acquiring new audiences. Digging a new well requires developing mission driven programming focused on an unmet need within your community. New programming initiatives are usually costly, and often times are prematurely abandoned when they don't hit a desired net revenue goal in a short period of time. Arts organizations need to view new programming initiatives as an investment in future audiences which will pay out over years instead of months. While digging new wells, it is important to maintain and cultivate your current well. Don't abandon the old for the new--let the returns from the old provide the investment capital for the new. Often times marketers are afraid of new programming because they don't want to risk offending current subscription audiences, but if you maintain a base level of traditional programming while offering an opportunity or two to test drive new programming, you will mitigate your risk of subscriber attrition. And for those who have highly subscribed houses, new programming might be the only opportunity that you have to get new audiences into your theaters which would otherwise be mostly sold out on subscription. During my final week at Arena Stage, I had to chuckle when a reporter asked me if we increased our number of musicals in the upcoming season because they were "cash cows." If only he knew that most musicals we produced actually lost money. Aside from artistic reasons, from a marketing perspective, we increased the number of musicals to attract more first time audiences, which we will then try to convert into lifetime patrons.<br /><br /><span style="font-weight: bold;">Direct Marketing.</span> During the last year, I have heard of several companies eliminating acquisition efforts entirely due to budget cuts, thinking that investing exclusively in retention campaigns would result in higher returns over time because the ROI was better than comparable acquisition campaigns. Unless you are in desperate shape, please do not kill your acquisition efforts entirely. And here's why--if you currently have a healthy 80% renewal rate for your members/subscribers, it means every year you will lose 20% of your base. Statistics show that even if you have a flawless renewal campaign, you will still lose 10% due to changes in lifestyle or death. To replace those lost, you must invest in acquisition or budget for a reduced base each year that you don't. If you cut acquisition entirely, with an 80% renewal rate, you will lose half of your entire base in three years. And getting them back is going to be incredibly expensive! When looking at acquisition costs, often times it will take two to three years for a new member/subscriber to produce a net positive result, but over a lifetime, these new acquisitions will be responsible for years of renewal revenue.<br /><br /><span style="font-weight: bold;">Robbing Peter to Pay Paul.</span> When the economy took a nosedive in 2008, marketers responded by looking for places to cut by thoroughly monitoring the cost of sale for individual campaigns. Normally, I would encourage such behavior. But I believe it has resulted in a zero sum game of gains and losses among the various theaters in the Washington, DC area. Studies show that even as venues have dramatically increased their capacities, <a href="http://www.washingtonpost.com/entertainment/theater-dance/washington-dc-theaters-have-they-overbuilt/2011/12/23/gIQAm6TIfP_story.html">theater audiences in our nation's capital have not grown</a>. And as we all looked for opportunities to reduce our marketing expenses, we refocused our acquisition campaigns to aggressively target the list segments that performed the best, which frequently were qualified leads of theatergoers from other companies. The most cost effective means of acquiring "new" audiences was soliciting patrons from other theaters. Acquiring "new" audiences didn't actually mean developing new theatergoers as much as it meant marketing to previous theatergoers who had never visited your theater before. This wasn't dirty pool. It is standard operating procedure in any highly competitive marketplace. But as I left Arena Stage, being incredibly proud that we had almost doubled our subscriber base in three years, I found myself being more interested in the number of none theatergoers we were able to convert into theater patrons. And the truth is I don't know because we never tracked it. As a community, the greatest challenge we have is developing truly "new" audiences in Washington, DC. If we are using each other as a primary source for our "new" audiences, then we aren't creating a healthier community as our individual successes come at the expense of others. Therefore I encourage marketers to look at acquisition in terms of developing completely new audiences for the community as well as acquiring new audiences for your organization. The latter will improve your individual health, while the former the health of the artistic ecosystem.<br /></div>http://arts-marketing.blogspot.com/2012/04/purposeful-acquisition.htmlnoreply@blogger.com (Chad M. Bauman)2tag:blogger.com,1999:blog-33812369.post-8568459290469765110Sun, 25 Mar 2012 20:23:00 +00002012-03-25T16:48:55.675-05:00Quick reflections on a changing media landscape<div> </div><div><strong><span style="font-weight: bold;"><span style="font-weight: bold;"></span></span><span style="font-weight: normal;">Just a few thoughts on the changing landscape of arts journalism...<br /><br /><span style="font-weight: bold;">Content aggregation vs. reporting.</span></span></strong><span style="font-weight: bold;"> </span>As newsroom staffs are being cut, an alarming number of original source reporting outlets are shifting to content aggregation. Very few media outlets now have dedicated full-time reporters that are assigned to the arts. With an increase in content aggregation and a decrease in original reporting, editorial power is shifting to the fewer outlets that are creating content which in turn feeds the increasing number of aggregators. Just a short time ago, it used to be that a significant story would be covered by several local and national outlets, allowing a well-rounded view of the story to emerge. Today, whatever the view of the originating source becomes the defacto view of aggregating outlets, thereby often times giving a single reporter the responsibility of judge, jury and executioner. That said, I have found that there are some journalists who aggregate content, and then editorially expound upon amassed content. I have found that in doing so, these journalists feel the pressure to produce original editorial based upon what others have said, but they do not view themselves as primary source journalists, meaning that they will comment on previous work, but will not expend the energy to actually conduct interviews or investigate if forgone conclusions are accurate.<br /><br /><span style="font-weight: bold;">The rise of "gotcha" journalism.</span> It used to be that purposefully snarky reporting was the realm of the social blogosphere, or at best, the weekly alternative paper. In a surprising turn of events, the <span style="font-style: italic;">Washington Post</span>, one of the most respected new sources for arts journalism in the country, sent out the following message in late February: “Got a grievance to air about the Washington arts scene? Is complaining your favorite form of catharsis? Our Sunday Arts section is seeking critics like yourself, who are interested in giving our local and cultural scene some tough love.” Why would such a reputable news source specifically solicit grievances and nothing else? Wouldn't they want a balanced view from the community on the impact of the arts in our nation's capital? particularly at a time when arts funding is getting slashed? I fear that ill-conceived attempts at gaining readership will result in using tactics that just a few years ago would have been laughed out of the newsroom. Quality arts reporting, as it rapidly diminishes in communities across the nation, should become a strong competitive advantage for those that continue to invest in it. For another viewpoint, please check out Howard Sherman's excellent post <a href="http://www.hesherman.com/2012/02/24/hey-washington-post-ive-got-a-gripe/">here</a>.<br /><br /><span style="font-weight: bold;">Pay to play, and the abandonment of journalistic ethics. </span>I have a feeling that even prehistoric publicists had to deal with "news outlets" that refused editorial coverage unless advertising money was attached, but it used to be that these outlets were few and came with tarnished reputations in their communities. Today it is almost as likely that a marketing director will arrange an editorial feature via an account rep as it is a publicist via an editor. And outlets aren't shy about it. Previously a publisher might say to you with a wink that he would see what he could do, but now they flat out tell you if you want to be reviewed, you need to buy an ad! If a feature article, and much more so a review, is attached to an advertising buy, journalistic ethics have been thrown out the door. Just on principle, even when I did have the resources to make an ad buy, if an offer was made, I walked away from the table. There has to be a line.<br /><br /><span style="font-weight: bold;">To tweet, or not to tweet? </span>If you are an executive of an arts organization, and you are considering joining Twitter, here are a couple of things to consider:<br /><ul><li><span style="font-weight: bold;">Twitter is a community.</span> If you do not have the time to adequately nourish online relationships in Twitter, don't join.</li><li><span style="font-weight: bold;">You are always on the record.</span> It is an open community in which anyone can ask any question at any time. Don't let the relaxed environment fool you. Every 140 character response is on the record. For a good laugh, please refer to the <a href="http://flavorwire.com/140457/the-top-10-celebrity-twitter-scandals#1">top 10 celebrity Twitter scandals</a>. It is easy to understand why journalists encourage joining, as many a good story have come of it.<a href="http://flavorwire.com/140457/the-top-10-celebrity-twitter-scandals#1"><br /></a></li><li><span style="font-weight: bold;">Silence speaks volumes.</span> Thinking about joining, and then side-stepping the tough questions? Often times what you don't say communicates even more than what you do say. You should be prepared to answer questions that you won't want to. And in this environment, "no comment" doesn't go over quite so well.</li></ul>That all said, if you have the time and are comfortable with complete transparency, then a Twitter feed can provide for strong relationships between you and a wide audience.<br /><br /><br /></div><span style="font-weight: bold;"><br /></span>http://arts-marketing.blogspot.com/2012/03/quick-reflections-on-changing-media.htmlnoreply@blogger.com (Chad M. Bauman)0tag:blogger.com,1999:blog-33812369.post-2231171599140875094Tue, 28 Feb 2012 20:25:00 +00002012-03-01T10:52:59.516-05:00Learning from the Past, Looking toward the FutureA little more than a week ago, I announced that I would be leaving Arena Stage to lead the marketing and membership efforts at the Smithsonian Associates at the end of March. I've been overwhelmed by the kind words and best wishes sent my way. For that, I am very grateful.<br /><br />Some have also asked if I plan to continue blogging. As you may have noticed over the years, my blog covers topics that I am passionate about, often times motivated by current trends and experiences. As I move from a performing arts organization to a museum and research institution, <span id="SPELLING_ERROR_0" class="blsp-spelling-corrected">undoubtedly</span> my perspective will evolve over time. However, I hope to continue to contribute to online dialogue and debate.<br /><br />My four-and-a-half years at Arena Stage have been the most rewarding and exhausting of my career. When one decides to pursue a career in a field they love, like many theater artists I know, these two adjectives are not mutually exclusive; in fact, many would argue that you can't have one without the other. When joining Arena Stage, I knew there were very few precedents for what we needed to accomplish, and with the opening of the Mead Center and a 2.5 year transition ahead of us, a clear path wasn't always available. It was an opportunity that intimidated me, but I knew that I would get an education of a lifetime.<br /><br />In looking back, I've learned quite a bit along the way...<br /><ul><li><strong>Always give an "exclusive" to your best and most loyal customers. </strong>Trust me, if they read something important in the daily paper before they hear it from you, they won't feel like part of the family.<br /></li><li><strong>Customer service can be a significant competitive advantage. </strong>When the whole world has come to expect awful customer service, it creates an easy opportunity to shine.<br /></li><li><strong>When hiring, if you have to pick between the two, a "fire in the belly" always trumps experience. </strong>One can teach skills, but one cannot be taught to take pride in their work.<br /></li><li><strong>Resources are an investment--monitor and expect returns. </strong>Marketing directors have two primary resources: human and financial capital. Where and when to invest each is a critical decision. When budgets are tight, monitor cost of sale and make data driven investments rather than emotionally driven ones.<br /></li><li><strong>Decisiveness is critical. Leap or die. </strong>Would you rather sip <span id="SPELLING_ERROR_1" class="blsp-spelling-corrected">champagne</span> and listen to the violins on the Titanic, or slap on a life vest and jump into the unknown? The unknown may be scary, but the known isn't an option. A delay in decision-making will almost always be costly, as it is rare for circumstances to change, but options will diminish. The non-profit theater landscape in the United States is changing rapidly, and adjustments must be made.<br /></li><li><strong>Maximize successes to mitigate risks. </strong>Unless you present nothing but bankable commercial successes, risks are inherent in the theater. When you catch a break, ride it for all that it's worth in order to mitigate the risk that is right around the corner.<br /></li><li><strong>Looking for improvements? Track results. </strong>By tracking, you send a signal to the company that something is important. Important enough to monitor. By not tracking, you send an equally powerful signal that something isn't worth the effort. Know your vital statistics, and track them aggressively.<br /></li><li><strong>Marketers are masters of <span id="SPELLING_ERROR_2" class="blsp-spelling-corrected">perception</span>, not reality</strong>. Unless you are talking about financials, marketers should keep their attention on perception. Perception, as we know, is reality for most.<br /></li><li><strong>Subscriptions aren't dying, theaters are killing them. </strong>If patrons can get great seats at a significant discount at the last minute, the value proposition of a subscription doesn't exist. Best seats at the best prices = more subscriptions (as long as the product is good).<br /></li><li><span style="FONT-WEIGHT: bold">Develop a strong team, and hire to your weaknesses.</span> Major accomplishments are always a team effort. Honestly assess yourself, recognize your weaknesses, and hire people that are better than you in areas where you need improvement.<br /></li><li><span style="FONT-WEIGHT: bold">Comp tickets are disrespectful.</span> There are a few good reasons to give a comp here or there, but nothing devalues the work of an organization or artists more than giving away free tickets. Why do we expect society to value the arts if we don't?<br /></li><li><span style="FONT-WEIGHT: bold">Make decisions for tomorrow instead of today.</span> Often times we are faced with decisions that could result in a short term gain, but a long term loss. Unless you are in desperate times, always set yourself up for a better tomorrow, even if it makes a more difficult today.<br /></li><li><span style="FONT-WEIGHT: bold">Take a Pavlovian approach to discounting.</span> Use discounting as a means to encourage desired behavior. Want people to purchase early? Avoid late discounts whenever possible.<br /></li><li><strong>Marketing and Development are two sides of the same coin. </strong>Look at revenue generation as a team with the goal of raising the most revenue at the least cost. Consolidate resources, eliminate redundancies, invest in campaigns that perform the best across the departmental divide, and look at your customers holistically with an eye toward building loyalty and lifetime value.<br /></li></ul>I will always remember my time at Arena Stage fondly, and am thankful for the education I received.<br /><p>Looking forward to catching a performance in the near future--this time though as an audience member (and yes, I will buy my tickets).</p>http://arts-marketing.blogspot.com/2012/02/learning-from-past-looking-toward.htmlnoreply@blogger.com (Chad M. Bauman)0tag:blogger.com,1999:blog-33812369.post-5123665677487572937Sat, 28 Jan 2012 19:16:00 +00002012-01-28T14:25:41.827-05:00Art or Audience; Chicken or Egg?Doug McLennan, Editor of <em><a href="http://www.artsjournal.com">ArtsJournal</a></em>, invited me to participate in an online debate on leadership in the arts. To kick things off, a panel of bloggers were asked to respond to the following prompt:<br /><br /> "Increasingly, audiences have more visibility for their opinions about the culture they consume. Cultural institutions know more and more about their audiences and their wants. Some suggest this new transparency argues for a different relationship between artists and audience. So the question: In this age of self expression and information overload, do our artists and arts organizations need to lead more or learn to follow their communities more?"<br /><br />There has been vigorous debate on this issue, and to check out all the arguments, please visit the "Lead or Follow" online discussion <a href="http://www.artsjournal.com/leadorfollow/">here</a>.<br /><br />As for me, below is my response to the aforementioned prompt:<br /><br />This week we examine the nature of leadership in the context of developing the most fruitful relationships with our audiences. Good relationships often strike a healthy balance between competing interests, and frequently this balance is forged over the course of many years. Arts organizations have relationships with their patrons, donors and communities, and those relationships are constantly evolving. As such, I find the framework of this debate limiting, as I would argue that great arts organizations lead and follow, and that we shouldn’t be asking if we should do more of one than the other, but instead ask if we are doing the leading or the following at the appropriate times.<br /><br />There are moments when arts organizations must lead, and that leadership becomes a catalyst of great change. In 1948, the National Theater in Washington, DC closed its doors rather than integrate, and a twenty-four year old Zelda Fichandler decided it was time for the city to have a producing theater of its own. She was an early proponent of the idea that communities should reclaim ownership of their theaters, and now sixty-one years later, there are more than 1,900 non-profit regional theaters in cities across the nation. It took a leader.<br /><br />There are also times when we follow. As of 2008, minorities accounted for <a href="http://www.fema.gov/pdf/about/programs/oppa/demography_%20paper_051011.pdf">48% of all births</a> in the United States. The <a href="http://www.census.gov/">U.S. Census Bureau</a> projects that by 2050, the Asian and Hispanic population will double, African-Americans will increase and the white population will decline by 9%. In addition, the percentage of the population that is elderly will almost double. Look at your board of directors, staff, donors and audiences—do they reflect your community? Is the physical structure of your building suitable for a growing number of elderly patrons? As a field, we are behind the curve, and we have much to learn from following as our communities are changing faster than we are.<br /><br />In terms of audience development, it is important for arts organizations to play both roles well. Our principal challenge as arts marketers is presenting art as a viable option for leisure activity. We have many barriers—ticket prices, transportation and parking, lack of arts education in our schools, inaccessible and aging infrastructure, etc. Not to mention, the abundance of free and easily accessible alternatives from our competition. A <a href="http://www.arts.gov/news/news09/SPPA-highlights.html">2008 Survey of Public Participation in the Arts</a> published by the National Endowment for the Arts (NEA) found that American arts audiences are getting older, and their numbers are declining at significant rates. In 2011, NEA Chairman Rocco Landesman delivered his now famous “<a href="http://www.artinfo.com/news/story/36871/its-time-to-prune-the-arts-says-embattled-nea-head-rocco-landesman/">supply and demand</a>” speech from <a href="http://www.arenastage.org/">Arena Stage</a>, indicating that demand for the arts is currently outpaced by supply, and suggesting that we consider pruning our numbers. We have a problem in this country. And if we have to produce more populist work in order to overcome potential barriers for first time patrons, I am fine with that. In fact, I am more than fine—it is what we should be doing.<br /><br />Populist work is often, for lack of a better term, a gateway drug. Lure them in with a musical, roll out a comedy, put in a Broadway touring production. Do what it takes. Once they have an exceptional first time artistic experience, art becomes an option and then we work to get them addicted. From the perspective of an arts marketer, once a new patron walks through our doors via a “gateway” play, my job is to get them back. Once they have had a few experiences, my responsibilities shift. I now focus my attention on broadening their experiences and pushing their boundaries. And they will be ready. But forcing them to run before they crawl will end up in a disappointing experience for all.<br /><br />Each patron has an individual relationship to an arts organization. We have a responsibility to offer up a balanced diet that feeds each artistic soul. For those with a developed palate, we lead, push, challenge and sometimes offend. And for those new to us, it is perfectly appropriate to offer up a piece of cake in order to get them to sample the exotic quiche.<br /><br />Currently at Arena Stage, we have a tremendous production of John Logan’s <a href="http://www.arenastage.org/shows-tickets/the-season/productions/red/">Red</a> directed by <a href="https://twitter.com/#!/RobertFalls201">Robert Falls</a>. In the script, painter Mark Rothko’s assistant Ken delivers a powerful speech, in which he says:<br /><br />“You know, not everything has to be so goddamn important all the time! Not every painting has to rip your guts out and expose your soul! Not everyone wants art that actually hurts. Sometimes you just want a fucking still life or landscape or soup can or comic book.”<br /><br />Remarkable arts organizations are more than just temples of art. We are relationship builders. Today we lead, tomorrow we may follow, but we take our cues from our communities, for whom we were built to serve.http://arts-marketing.blogspot.com/2012/01/art-or-audience-chicken-or-egg.htmlnoreply@blogger.com (Chad M. Bauman)2tag:blogger.com,1999:blog-33812369.post-3892084635077517236Mon, 16 Jan 2012 19:42:00 +00002012-01-16T16:34:02.375-05:00http://www.blogger.com/img/blank.gifPartners or Competitors? My Favorite Frenemies<div>A little more than a week ago, the <span style="font-style: italic;">Washington Post</span> in an extraordinary effort by a daily newspaper, published a series of articles on the <a href="http://www.washingtonpost.com/entertainment/theater-dance/the-state-of-dc-theater/2012/01/03/gIQADvwIfP_story.html">state of theater in Washington</a>, DC. As part of that series, Nelson Pressley, a frequent contributor for the Post, wrote an interesting piece on the <a href="http://www.washingtonpost.com/entertainment/theater-dance/washington-dc-theaters-have-they-overbuilt/2011/12/23/gIQAm6TIfP_story.html">financial status of the community</a>. In it, he notes that in terms of capacity, the Washington theater community has grown tremendously over the past decade, while government funding has decreased significantly and according to<a href="http://theatrewashington.org/"> theaterWashington</a>, the annual theater attendance has remained the same since 1988. Mr. Pressley also cites that each theater that has expanded reports significantly increased audiences, and several have recently set all-time sales records.<br /><br /></div><div> </div><div>In the Twittersphere, this article raised the same question that NEA Chairman Landesman asked in his now famous "<a href="http://arts-marketing.blogspot.com/2011/01/youre-mad-what-are-you-going-to-do.html">supply and demand</a>" speech given at Arena Stage in January 2011. Is there enough demand to support the increase in supply? This isn't a new question. It is something I questioned in this <a href="http://arts-marketing.blogspot.com/2008/11/asking-unpopular-is-there-too-much-art.html">blog</a> in 2008, and it is something that arts administrators discuss at every conference I have ever attended.<br /><br /></div><div> </div><div>Setting aside for the moment the data from theaterWashington, on a positive note, I've seen some extraordinary things in the DC theater community in the past few years. I'd heard that the city can only support one or two major hits at any given time, however in the late fall of 2010, several theaters reported exceptionally strong attendance numbers for multiple shows running at the same time, including <span style="font-style: italic;">Oklahoma!</span> and <span style="font-style: italic;">every tongue confess</span> at <a href="http://www.arenastage.org/">Arena Stage</a>, <span style="font-style: italic;">Candide</span> at <a href="http://www.shakespearetheatre.org/index2.aspx">Shakespeare Theatre Company</a>, <span style="font-style: italic;">Sunset Boulevard</span> at <a href="http://www.signature-theatre.org/">Signature Theatre</a>, and<span style="font-style: italic;"> A Christmas Carol</span> at <a href="http://www.fordstheatre.org/">Ford's Theatre</a>. Well, there went that long held belief. When Arena Stage was considering a 13 week summer remount of <span style="font-style: italic;">Oklahoma!</span>, I was told that the city could not support a long sit down production of a major musical in the summer as August was completely dead in these parts, and we couldn't succeed with Congress out of session and everyone heading to the beach. Surprise, surprise when not only Arena Stage experienced sold out houses at the height of the summer doldrums, but <a href="http://www.woollymammoth.net/">Woolly Mammoth Theatre Company</a> did as well with their remount of <span style="font-style: italic;">Clybourne Park</span>. As a community, I don't think there is anything we like better than being told we can't do something, and then proving that we can.<br /><br />But to Nelson's point, we have a significant challenge ahead of us. In discussing his article on Twitter, playwright <a href="https://twitter.com/#%21/playwrightsteve">Stephen Spotswood</a> asked me "how much do DC theater companies feel like they are in competition with each other?" Soon thereafter,<a href="https://twitter.com/#%21/petermarksdrama"> Peter Marks</a>, theater critic of the <span style="font-style: italic;">Washington Post</span>, asked me to answer the question on the record. And this is my attempt...<br /><br /><span style="font-weight: bold;">Are DC theater companies in competition with each other?</span><br />Yes. In my opinion, to think otherwise would be naive. People have limited disposable income, especially during tough economic times. However, we are very lucky. Washington, DC is weathering the economic downturn<a href="http://www.msnbc.msn.com/id/35768355/ns/business-forbes_com/t/ten-cities-managing-weather-recession/"> better than any other city in the nation</a>. Although we have had our challenges, we have a leg up on everywhere else, and perhaps this is why we have been able to expand during turbulent times. <span style="text-decoration: underline;"></span>But in terms of how people are going to spend their leisure time, theaters are in competition with each other as much as they're in competition with movies, sports, other performing arts, museums, television, YouTube, video games, etc. To say that we aren't is simply untrue.<br /><br />That being said, if I am in competition for discretionary spending dollars, I want it to be with another theater. Why? I can't get patrons to come to my theater if they don't see theater as an option in the first place. My primary responsibility as a theater marketer is to get people interested in the theater. To increase the stability of our community, we have to grow the base of theater patrons in our city. We don't have any other option, and to do that, we have to view ourselves as partners first and competitors second. If we focus on cannibalizing each other's audiences, it will be a losing battle. One theater may win one year, but inevitably it will lose the next. The only way everyone wins, including the city, is if we cultivate a growing audience for all of our theaters.<br /><br />In responding to Stephen's question, I would also say that I tend to think that competition in the marketplace is good. When competition is stiff, it pushes everyone to do their best. To produce work of the highest quality. To provide the best customer service. To nurture the best local talent, and to present preeminent artists from around the globe. Please forgive the personal anecdote, but I know I have a more rewarding workout when there is a strong runner on the treadmill next to me. If there is no one by my side pushing the pace, I won't exert as much energy. I want to keep up. I want to compete. And because of our competitive spirit, DC audiences will get to experience the best efforts of all.<br /><br />As I look into the new year, I resolve to elevate my gaze whenever possible from being exclusively on the theater where I work to the community as a whole. I hope that competition will improve us individually, and that working together will improve us as a whole.<br /></div>http://arts-marketing.blogspot.com/2012/01/partners-or-competitors-my-favorite.htmlnoreply@blogger.com (Chad M. Bauman)3tag:blogger.com,1999:blog-33812369.post-1451080371985214531Fri, 16 Dec 2011 01:48:00 +00002011-12-15T22:21:31.887-05:00Who are your best customers (and why many don't know)?<div>Some time ago, I was at the box office when a major donor who lives out of town came up to the window. I instantly recognized her even though she hadn't visited us in quite some time. After warmly welcoming her back, I stepped away briefly to attend to another matter, and when I returned to continue our conversation, I was startled to see that she was being charged an exchange fee to transfer into another performance. When I inquired, the box office associate rightly told me that she wasn't a subscriber, and that waiving exchange fees was a subscriber benefit. In this case, the patron wasn't a subscriber because she lived thousands of miles away, however she was an incredibly generous donor, giving both to our annual fund and our campaign. Her giving over the years easily made her one of our most valuable customers, but because she wasn't a subscriber, the box office didn't grant her one of our entry level benefits.<br /><br />This wasn't a human error, but a systemic one. At the time, we were operating a ticketing software that didn't reflect giving history, so there was no way the box office associate could have known the patron's lifetime value. And even if the ticketing system notified the box office associate of the patron's giving history, the associate would have had to override the benefits structure we had in place as complimentary ticket exchanges were a subscriber benefit, not a donor benefit.<br /><br />We had a problem. Fundamentally, how we defined our best customers changed depending upon which department was asked, and the company as a whole had yet to identify our best customers in a holistic manner.<br /><br />Two years ago, we took the first steps to address this issue. First, we replaced our antiquated ticketing software with an integrated database that housed all transactional data across our various departments allowing users to see an overall picture of each patron. Once in place, we had to develop a system for defining our best customers from the perspective of the entire company. We hired <a href="http://www.trgarts.com/">Target Resource Group</a> to develop an algorithm that incorporated all transactional possibilities with our company, and then apply that algorithm to our database to develop a Patron Loyalty Index score for patrons in our system based upon transactions over the previous five fiscal years. The index scores allowed us to separate our database into four major categories, and today, certain overriding benefits are assigned to the higher level categories.<br /><br />If the aforementioned major donor were to come to our box office today and request an exchange for a single ticket purchase, an associate would enter her information into our database, and the database screen would immediately turn red--our signal that we are interacting with someone with a very high Patron Loyalty Index rating. The associate would then know that an exception to the exchange rule would be in order as a result of the major donor's lifetime value to the organization.<br /><br />The way the communications and development departments do business at Arena Stage has fundamentally changed over the course of the past two years. We view ourselves as full partners in building patron lifetime value. We work together to increase loyalty, reduce attrition and grow revenue. Subscriber renewal rates are at an all-time high, patron churn has decreased by 7%, the number of full season subscribers has increased 18%, and our membership program is pacing well ahead of last year.<br /><br />Knowing who our best customers are has made all the difference.</div>http://arts-marketing.blogspot.com/2011/12/who-are-your-best-customers-and-why.htmlnoreply@blogger.com (Chad M. Bauman)3tag:blogger.com,1999:blog-33812369.post-4763838674444009734Sun, 20 Nov 2011 20:26:00 +00002011-11-20T17:09:16.031-05:00Customer Service as a Competitive Advantage<div>I’ve just returned from the <a href="http://www.artsmarketing.org/">National Arts Marketing Project Conference</a>, the annual gathering of arts marketers convened by<a href="http://www.artsusa.org/"> Americans for the Arts</a>. I’ve gone to the conference for the past seven years to reconnect with colleagues, learn from case studies and catch up on new trends. As I return home this year, I am mindful that some arts marketers have limited control or influence over mission critical decisions, many of which affect audiences, revenue streams and branding. As marketers position themselves as growing agents of influence in their various organizations, I can’t help but think that perhaps our energies should be spent concentrating on the underperforming areas in which we can be the most impactful.<br /><br />In this new environment of reduced resources, the ability for an organization to identify its competitive advantages is vital. Some of which, marketers have no responsibilities for. Others, we lead. In listening to <a href="http://www.unmarketing.com/">Scott Stratten's </a>opening keynote address at the conference, I was reminded that the general woeful state of customer service provides a prime opportunity for arts organizations to distinguish themselves. In short, Scott reminded us that we should always look for "opportunities to be awesome."<br /><br />Some thoughts on how we can achieve awesomeness…<br /><br /><strong>Awesomeness comes from humanness. </strong>We have our rules. Our policies and procedures. It is easy and efficient to train automatons. But the greatest value of human interaction from a transactional perspective is our unique ability to empathize, reason and trouble shoot. We have to encourage front line brand ambassadors to use their judgment. Empower them to solve problems. Reward them for breaking the rules when required because by design, rules are created for routine situations, not exceptional ones. Why hire smart and caring people if those attributes don’t influence operations? I left the conference thinking that if we all treated our customers like we would our mothers, our spouses, our best friends, that we might have lifelong relationships with them as well.<br /><br /><strong>Awesomeness is unexpected. </strong>In the spirit of a random act of kindness, what if we asked our brand ambassadors to perform one act of unexpected awesomeness each day? It doesn't have to be a splashy show, as even an understated, thoughtful gesture can make someone's day. Imagine a scenario where a man calls the box office to get tickets to a performance for his wife to celebrate their anniversary, and the box office associate makes a note and leaves a few chocolates and an anniversary card waiting in their seats when they arrive. Wouldn't that be awesome? and don't you think they would remember that gesture for years to come?<br /><br /><strong>Awesomeness doesn't wait for approval. </strong>Many times awesomeness is a derivative of authenticity. If corporate policy dictates that brand ambassadors need to get approval to provide extraordinary customer service, then the window of opportunity to be awesome disappears. Great customer service comes from authentic responses. If we hire caring and helpful brand ambassadors, managers need to step out of the way and let them do what they do best. Don't lose an opportunity to be awesome because you have to send it up the ladder for approval.<br /><br /><strong>Awesomeness often results from a mistake. </strong>We all make mistakes, even the best of us. Even when we have the best intentions. What really matters is how we respond to our mistakes. Mistakes must be viewed as opportunities to provide great customer service. An extraordinary response to a mistake can provide for a lifelong memorable experience for a customer. In 2008, Arena Stage had to cancel a performance due to a substantial snowstorm, and although we contacted all the patrons we had contact information for, we didn’t get through to everyone. Prior to leaving their house in Philadelphia, one particularly adventurous couple called the sales office, and were informed the performance in question was still scheduled to perform. When they arrived, and discovered the show was canceled and the weather had deteriorated, not only were they disappointed, but they were stranded as well. We should have canceled earlier to give our patrons more notice. But before us was an opportunity to be awesome. Without being asked, our sales office worked with a partner hotel to arrange a room for them free of charge that evening using some trade rooms available to us from a previous cross-promotion. We reseated them into the following day’s performance, and the couple headed back to Philadelphia with a fond memory of their visit to Arena Stage. The moment immediately following a significant mistake is crucial. Don't hesitate. Own the mistake, and resolve it above and beyond a customer's expectations.<br /><br />Arts organizations are charged with building communities. Communities are centered around relationships. We are in the relationship-building business. As such, we should approach each patron interaction from a position of "yes" rather than "no." Policies and procedures should be built with a focus on deepening our relationships within our communities. And each day as we go into work, we should look for opportunities to be awesome.<br /></div>http://arts-marketing.blogspot.com/2011/11/customer-service-as-competitive.htmlnoreply@blogger.com (Chad M. Bauman)6tag:blogger.com,1999:blog-33812369.post-1423893084258484323Sun, 23 Oct 2011 22:16:00 +00002011-10-24T21:12:05.418-05:00Rebranding the Traditional Box Office<div>In a previous post entitled <a href="http://arts-marketing.blogspot.com/2011/09/subscriptions-dead-maybe-not.html"><em>Subscriptions Dead? Maybe Not, </em></a>I discussed various strategies Arena Stage employed in order to significantly increase its subscriber base. One of the most important was systematically identifying the best subscriber leads in our database, and then developing and implementing strategies to increase the number of similar leads.<br /><br />Like many others, we traded lists with other performing arts organizations during the acquisition portion of our subscription campaign. However, in doing so, we experienced an incredibly high cost-of-sale for each new subscriber. Even when factoring in the value of each new subscriber over multiple years, returns from mailings to traded lists didn't justify the cost. Our strategy was flawed, and it was time for a change.<br /><br />Data showed that our best leads were in our own database, with the best of the best being single ticket buyers who purchased tickets to multiple productions during the previous fiscal year. Instead of trying to attract new subscribers with no prior transactional history with us by sending direct mail campaigns to traded lists, we shifted strategy by focusing on building multi-buyers during the 2008-09 season. The new strategy was simple--if multi-buyers were the best prospects for subscriber acquisition campaigns, then the more multi-buyers we had, the better off we were for the following year's subscription campaign.<br /><br />Instead of trading lists for subscription mailings, we traded lists for our most popular productions. Transactional data showed that by luring in new patrons via our most popular programming, we had a much better shot of cross-selling them into other productions soon after they had their first great experience at our theater. If new patrons purchased tickets to just one additional production during the season, they were exponentially more likely to subscribe than a lead with no prior transactional history with us.<br /><br />Our focus was now clear--in order to grow our subscriber base, we must first focus on building the number of multi-buyers throughout the year. And the most critical component of that strategy was refocusing our ticket sales operations by shifting our box office to a sales office.<br /><br />The prevailing feeling at the time was that our box office associates were "order takers." They were expected to pick up the phone and process each order in a courteous and timely fashion. They were evaluated on efficiency instead of effectiveness. With the beginning of the 2008-09 season, we rebranded our box office (now referred to as a sales office), and made it clear that associates were expected to function as sales consultants. They were now responsible for up-selling, cross-selling and proactively soliciting annual fund donations. To prepare the office, I promoted an exceptionally entrepreneurial minded manager to lead the division, and she in turn, brought in several experts to train our staff. We adopted a mantra of sales through service, and in doing so, viewed each opportunity to cross-sell as a moment to provide excellent customer service.<br /><br />Three years later, I am very pleased with our results:<br /><br />From FY08 to FY11, new-to-file households (those that had no previous transactional history with Arena Stage) increased by 90%, but even more importantly, multi-buyer households increased by 44%, giving us a much larger "best prospects" pool for new subscribers. In this fiscal year alone, that pool was converted into more than 5,100 new subscribers. Despite what some viewed as aggressive sales techniques, our 2011 customer satisfaction survey revealed that satisfaction levels were at an all-time high, and our attrition rate decreased 6% over the last two years.<br /><br />Today, our sales associates up-sell seat locations, cross-sell buyers into similar programming, solicit various levels of annual fund donations, offer to make reservations at our cafe, suggest pre-paid parking, and will even arrange for a car service with a preferred provider. In addition, during slower sales cycles, our associates also provide support to our group sales office, and participate in outbound calling. By doing so, we maximize revenue, while growing the number of multi-buyer households and providing premium concierge service to all patrons.</div>http://arts-marketing.blogspot.com/2011/10/rebranding-traditional-box-office.htmlnoreply@blogger.com (Chad M. Bauman)2tag:blogger.com,1999:blog-33812369.post-8299738721597009088Sun, 18 Sep 2011 18:22:00 +00002011-09-18T21:10:22.108-05:00Subscriptions Dead? Maybe Not.<div><div>When I joined <a href="http://www.arenastage.org/">Arena Stage</a> in 2007, I came to my new job with a couple of preconceived notions about subscriptions. Perhaps it was in part a reflection that I am on the <a href="http://en.wikipedia.org/wiki/Generation_X">Generation X</a>/<a href="http://en.wikipedia.org/wiki/Generation_Y">Millennial</a> cusp, but I was certain that the subscription model was outdated and ineffective. Many mature organizations that had developed their business models on subscriptions were seeing significant declines in subscriber numbers, and were literally caught between a rock and a hard place -- should they dump their subscription model and<a href="http://www.seattlepi.com/ae/article/Act-Theatre-goes-for-Netflix-payment-option-881702.php"> leap into the unknown</a>, or keep putting band aids on a failing and timeworn strategy? Reports from major performing arts organizations at the time seemed to indicate a trend of declining returns, forcing a feeling that immediate change to a staple in our business model could be warranted.<br /><br />In early 2008, Arena Stage along with a few other <a href="http://lort.org/">LORT theaters</a>, began to test subscription alternatives in focus groups. In doing so, I was absolutely certain that the results would show at least one, if not several, attractive alternatives to subscriptions. I was wrong. Our work indicated that each option we put forth was less attractive to target single ticket buyers, multi-buyers and current subscribers than what we currently had. I was so surprised that we conducted a second series of focus groups with similar results. Amazed and confused, after a few months, I concluded our market research indicated that the subscription model wasn't outdated, but that our execution was flawed.<br /><br />With the help of <a href="http://www.trgarts.com/">Target Resource Group</a>, we conducted a thorough audit of all subscription related practices, and started making significant changes in mid-2008. Since our 2008-09 season, Arena Stage has experienced substantial growth in subscriptions, increasing our subscriber base by 57% and revenue by 73% in three fiscal years, beginning 1.5 years before the opening of the<a href="http://arenastage.org/plan-your-visit/the-mead-center/"> Mead Center for American Theater</a> at the height of the global economic crisis and during a time when we were performing in transitional spaces throughout the metropolitan area. Even more surprising, during the same time period, our subscription related marketing expenses decreased, which along with increased revenue, effectively doubled our return on investment (ROI).<br /><br />Below is a brief summary of major tactical changes:<br /><br /><span style="font-weight: bold;">Simplified Pricing.</span> Our previous subscription pricing strategies were incredibly complicated. I remember spending hours poring over pricing strategy, and at the end thinking that one would have to be a CPA to understand how our pricing model worked. We decided that in order to create an effective value proposition, subscription pricing would have to be clear and easy to understand. We worked for weeks to develop a simple pricing structure that could be messaged easily, such as "buy 6 plays, get 2 plays free." The new pricing structure allowed us to easily communicate a value proposition and to eliminate complicated order sheets, replacing them with order forms that could be filled out easily. Clear, concise and transparent pricing was pivotal to effectively communicating the value of a subscription.<br /><br /><span style="font-weight: bold;">Introduction of Dynamic Pricing for Single Tickets</span>. In 2009, Arena Stage introduced <a href="http://arts-marketing.blogspot.com/2011/07/non-profit-variant-of-dynamic-pricing.html">dynamic pricing for single tickets</a>, and we immediately started to see an unanticipated outcome. Due to our new subscription pricing structure and the introduction of dynamic pricing for single tickets, we were able to guarantee subscribers "the best seats in the house at the best prices." Dynamic pricing eliminated last minute discounting on premium tickets, and rewarded single ticket buyers with a lower price for better seats if they were willing to purchase earlier. In turn, our patrons soon started to understand that the earlier they purchased, the better "the deal" they received, with the ultimate deal being given to subscribers. As we religiously track all customer service issues, we can say with full confidence two years later that dynamic pricing has not caused distress with our ticket buyers or donors, and in fact, from the moment we introduced dynamic pricing to current day, we have increased the number of single ticket buyer households by 84%.<br /><br /><span style="font-weight: bold;">Focus on Retention and Customer Service</span>. We were allocating too much resource on subscription acquisition, and not enough on subscription retention. We developed a "say yes to the customer" approach with our subscribers, thereby earning us "industry leader" marks on our most recent customer satisfaction survey conducted by <a href="http://shugollresearch.com/">Shugoll Research</a>. Year to year benchmarks for customer service have increased steadily as we focused on providing our subscribers the best experience possible. Given today's sad state of customer service at most establishments, we were determined that our customer service would be a competitive advantage. In addition, we allotted resources for special subscriber recognition efforts throughout the year, including a sneak preview of the upcoming season, complimentary artisan chocolates at specific performances and subscriber-only events. During the 2010-11 season, we introduced a concierge program for all new subscribers. Each new subscriber was assigned a personal concierge on staff, who was expected to make themselves available to answer questions, field requests or be helpful in any way. Concierges were reactive to inbound inquiries, but were also expected to be proactive throughout the year, offering new subscribers recommendations on local restaurants, parking, interesting tidbits about upcoming productions, and the like. By concentrating on customer service and retention, we were able to increase our overall subscription renewal rate by 13% over three fiscal years.<br /><br /><span style="font-weight: bold;">Eliminated Advertising, but Increased Direct Mail and Telemarketing.</span> Prior to 2008, 25% of our subscription budget was allocated to advertising. After exhaustive efforts, we could not trace a single subscription purchase back to our advertising campaigns. Therefore, we cut all subscription advertising, and refocused those resources on direct mail and telemarketing. In doing so, we completely revamped our direct mail and telemarketing campaigns. In terms of direct mail, we would previously print hundreds of thousands of season brochures, and then mail them out in a few rounds of massive mailings. Our brochures were 28 to 32 pages in length, and functioned more as a branding tool than a sales piece. Today, we send out 30+ direct mail pieces during each subscription campaign that specifically tailor the offer to the target. We have eliminated our subscription brochure, cut our design costs by 60%, and have directed all of our resources to testing message and offer. For more information on our new approach to direct mail, please read "<a href="http://arts-marketing.blogspot.com/2009/06/future-of-season-brochure.html">The Future of the Season Brochure</a>." While retooling direct mail, we also invested heavily in telemarketing. If executed properly, many patrons actually view telemarketing as a service, as it allows them the opportunity to discuss the plays with a seasoned caller and to ask any questions they may have. As the economy worsened, we found that many potential subscribers needed personal interaction with a friendly and knowledgeable sales agent in order to make a commitment.<br /><br /><span style="font-weight: bold;">Delayed the Introduction of Smaller Packages and Concentrated on Upgrade Strategies</span>. In 2009, we started to experiment with delaying the on-sale date of partial season packages in order to focus our efforts on upgrading subscribers to the full season. There was a fear at the time that our partial subscribers would become frustrated, and leave the company all together, but I was confident that our programming was strong enough that a delay would encourage subscribers to upgrade. The value proposition was clear -- the only way to guarantee the absolute best seats in the house for our most popular productions was to purchase a full season subscription. By focusing on full season subscriptions and postponing the introduction of partial subscriptions, we were able to increase the percentage of full season subscribers by 14% from FY09 to FY12. Expanding upon previous successes, in 2011 we launched a completely separate upgrade campaign alongside our renewal and acquisition campaigns. In addition to crafting and executing strategies that focus on renewals and acquisitions, we now also focus on upgrading subscribers throughout the year. These strategies have proven to be quite effective, and as of publication, we have upgraded more than 1,800 subscribers from smaller packages to larger packages in the current fiscal year.<br /><br /><span style="font-weight: bold;">Relentless Dedication to Monitoring ROI.</span> In FY12, we will spend almost 20% less on subscription expenses than we did in FY08 despite the fact that the number of new subscribers has increased by 166% during the same time. I've always been taught that acquisition campaigns are expensive; that you have to "spend money to make money." In most cases, I agree, however if you aggressively monitor ROI on each campaign, in many cases, you will find efficiencies that will allow you to actually decrease your expenses in the middle of an aggressive acquisition cycle. Many marketers think that given limited staff resources, tracking ROI is too time consuming, however a relentless dedication to monitoring ROI will reveal where you should invest in the future, and more importantly, where you should cut.<br /><br />In addition to the above, it should also be said that the most important ingredient to any subscription campaign is programming. A subscription campaign is both a referendum on the previous season and an indicator on the amount of excitement in the marketplace for the upcoming season. In my time at Arena Stage, I have been extraordinarily lucky that our artistic team has consistently produced and presented exceptionally high quality work, without which, the aforementioned tactics would have only resulted in minor successes at best.</div></div>http://arts-marketing.blogspot.com/2011/09/subscriptions-dead-maybe-not.htmlnoreply@blogger.com (Chad M. Bauman)7